A lender credit is the mirror image of paying points: you accept a slightly higher rate, and the lender puts money toward your closing costs in exchange. With illustrative round numbers: say the par rate, the baseline with no points and no credit, is 6 percent. Take 6.25 percent instead, and the lender credits roughly 1 percent of your loan amount toward closing costs, because the higher rate earns the lender more over the life of the loan and they share some of that back at the table. Those ratios are rough benchmarks rather than guarantees, and in unusual rate environments the trade can move well away from them. Lender credits earn their keep when you're short on cash to close, or when you don't expect to keep the loan long enough for a lower rate to pay back an upfront cost. The other direction, paying points to buy the rate down, is one we lean against as a default. The zero-point quote is the honest baseline, and the break-even on points often doesn't survive a realistic time horizon. A points comparison is still something some people want to see, and we'll run it for you, credit version and points version side by side with the real break-even, in the free Roadmap conversation.