Discount points are fees paid at the closing of the loan for a reduced interest rate. One discount point costs 1% of your mortgage loan amount. Essentially, you are prepaying part of your interest upfront in order to lower your monthly payment.
Over time, the savings from the lower interest rate may outweigh the cost of the discount point. When considering whether points are right for you, make sure you run the numbers to know how long it will take for the upfront cost to be worthwhile.
Please speak with your home loan originator for a personalized rate offer.