Close to $100,000 by the rule of thumb, and in practice nobody would sell you that loan anyway. Walk the illustrative math with round numbers, no current rates involved. In a normal market, one point (1% of the loan amount) buys roughly a quarter percent of permanent rate reduction. On an $850,000 loan, one point is $8,500. A full 1% of rate is four quarter-point steps, so about four points, roughly $34,000. Three full points of rate, from an illustrative 8% down to 5%, is about three times that, which lands near $100,000. Two caveats: - The math is optimistic. The further you push below the market's par rate, the more each additional increment costs. The steps get steeper as you go, so the real number climbs faster than the rule of thumb suggests. - The loan would not exist. In an environment where the market sits near an illustrative 8%, no lender hands out a fixed 5% on a conforming Fannie or Freddie loan at any price, because no investor would buy that loan. So a 3-point swing is a thought experiment. We lean against paying points in general, and a smaller, targeted buydown is something some people still want to see, so we will run that comparison for you, break-even included, before you spend a dollar on it.