: You itemize your deductions. For a primary residence, points are generally 100% tax-deductible in the year you pay them as "prepaid interest". When to Avoid Buying Points
Buying points is essentially a long-term investment. It is generally a good idea if: buying points on mortgage
Cost of Points / Monthly Savings = Months to Break Even Scenario (on $300,000 Loan) Without Points With 1 Point ($3,000) Interest Rate Monthly Payment (P&I) Monthly Savings Break-Even Period 60 Months (5 Years) Calculated based on standard industry examples. When It Makes Financial Sense : You itemize your deductions