A point is 1% of your loan amount, paid up front to lower your rate, and our lean is against paying points as a default. The trade: the lender collects some interest early in exchange for a lower rate. As a rough rule of thumb in a normal market, one point buys roughly a quarter percent off the rate, with a break-even around five years, though that ratio shifts with the rate environment and is never guaranteed. It runs in reverse too: you can take a slightly higher rate for a lender credit toward closing costs if you're short on cash. A seller-paid or builder-paid buydown is a credit the seller or builder agrees to, directed at your rate instead of general closing costs. Remember whose money that is. A credit comes in lieu of a lower purchase price, so you finance it in a bigger loan for as long as you hold the home. Two kinds of buydown: - Permanent. Points paid to lower the rate for the life of the loan. Once paid, that money is gone, even if you refinance the next month. - Temporary (a 2-1). The payment is subsidized 2% below your note rate in year one and 1% in year two, then reverts to the real rate. The subsidy sits in a separate escrow account, and if you sell or refinance before it runs out, the leftover is credited back to you. Whether any of it helps hinges on how long you hold the loan. If you'd likely refinance within a few years, taking the credit toward closing costs, or as a lower price, often beats a permanent buydown, and nobody can promise where rates go. The buydown math is something some people want to see, and we'll run that comparison against your exact loan on the free Roadmap conversation.