What are discount points on a mortgage?

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    StellarFi
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    Team StellarFi
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    Discount points are also called mortgage points. Borrowers pay discount points as a one-time fee to reduce their mortgage or refinance interest.

    Buying discount points is completely optional.  One discount point costs 1% of the mortgage amount and the lender usually reduces the interest rate by 0.25% for it. But it is difficult to say how much a discount point will reduce the interest rate. The “discount” depends on the lender, type of loan, current rates, and other factors.

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StellarFinance, Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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