# Discount points

> Money you pay up front at closing to lower your interest rate. One point costs 1% of the loan amount.

By David Knorr, founder of BuyWise Home. Last reviewed October 28, 2026. Web page: https://www.buywisehome.com/guide/glossary/discount-points

## Why it matters to you

Points only pay off if you keep the loan long enough to earn back what you paid. Divide the cost by the monthly saving to find how many months that takes.

> Example: On a $300,000 loan, one point costs $3,000. If it saves $60 a month, you break even after 50 months, just over four years.

## Related

- [Step 2: Get pre-approved](https://www.buywisehome.com/guide/get-pre-approved)
- [APR](https://www.buywisehome.com/guide/glossary/apr): The yearly cost of a loan, with some fees included, as one percentage.
- [Loan Estimate](https://www.buywisehome.com/guide/glossary/loan-estimate): A standard form every lender gives you, so you can compare loans side by side.
- [Rate lock](https://www.buywisehome.com/guide/glossary/rate-lock): A lender's promise to hold your rate for a set time while your loan is processed.

_General information based on the standard Georgia REALTORS® purchase contract and public guidance. Your own contract decides: read it, and ask your agent or closing attorney about anything that matters. Not legal or financial advice._