# "Points" on a mortgage loan - A Farce? **URL:** \ **Category:** Factual Questions\ **Created:** [June 1, 2001, 5:53pm UTC](https://boards.straightdope.com/t/points-on-a-mortgage-loan-a-farce/67237 "2001-06-01T17:53:06Z")\ **Posts on this page:** 6\ **Page:** 2
**Author:** ![dolphinboy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dolphinboy/32/330_2.png) [@dolphinboy](https://boards.straightdope.com/u/dolphinboy)\ **Post date:** [June 4, 2001, 9:57pm UTC](https://boards.straightdope.com/t/points-on-a-mortgage-loan-a-farce/67237/21 "2001-06-04T21:57:48Z")
Really cmkeller? I certainly wouldn’t consider something that happened in 1980 as recent… ---
**Author:** ![Sue\_Duhnym](https://avatars.discourse-cdn.com/v4/letter/s/91b2a8/32.png) [@Sue\_Duhnym](https://boards.straightdope.com/u/Sue_Duhnym)\ **Post date:** [June 4, 2001, 11:01pm UTC](https://boards.straightdope.com/t/points-on-a-mortgage-loan-a-farce/67237/22 "2001-06-04T23:01:06Z")
My hubby and I move a lot. Part of the deal with the firm he works for is that they pay all of the closing costs on both ends plus **2 1/2 points**. This allows us to save some serious cash, especially if you figure that we’re not going to be in any one place for more than a few years, enabling us to take a 5 yr fixed (Prime +2 thereafter) mortgage w/o risk. Currently, our mortgage is at 6.25%. On our “jumbo”, it makes a helluva difference. Plus it’s exceedinly fun when telemarketers call to see if we want to refinance. “Can you beat 6.25%?” “Uh…thank you for your time.” 😃 ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [June 5, 2001, 12:24am UTC](https://boards.straightdope.com/t/points-on-a-mortgage-loan-a-farce/67237/23 "2001-06-05T00:24:32Z")
Sue, you are obviously _not_ undersatnding my point which is that you are really _not_ paying 6.25% and, in fact you are paying a higher rate plus a prepayment penalty. If you give me the numbers I’ll tell you exactly what you are paying. As an example: $100000 loan, 2.5 points, 6.25% interest, 360 months equals 0 points, 6.49% interest. If you pay it off at the end of 72 months the equivalent prepayment penalty is $2035. Of course, if someone else is paying then that’s another thing alltogether. But you pay for points. ---
**Author:** ![Sue\_Duhnym](https://avatars.discourse-cdn.com/v4/letter/s/91b2a8/32.png) [@Sue\_Duhnym](https://boards.straightdope.com/u/Sue_Duhnym)\ **Post date:** [June 5, 2001, 5:39am UTC](https://boards.straightdope.com/t/points-on-a-mortgage-loan-a-farce/67237/24 "2001-06-05T05:39:36Z")
> [@](#): > > \*Originally posted by sailor \* > Sue, you are obviously _not_ undersatnding my point which is that you are really _not_ paying 6.25% and, in fact you are paying a higher rate plus a prepayment penalty. Sailor, you are obviously **NOT** understanding **MY** point. We **ARE** paying 6.25% because the **FIRM** paid the points. Hence, it’s a great deal for US. I said it was anecdotal, I wasn’t disagreeing with you. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [June 5, 2001, 7:27am UTC](https://boards.straightdope.com/t/points-on-a-mortgage-loan-a-farce/67237/25 "2001-06-05T07:27:07Z")
Sue, I wasn’t disagreeing with you either. Sorry if I sounded that way. If someone else pays, that’s always a good deal. No question about it. ---
**Author:** ![Skywatcher](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/skywatcher/32/254_2.png) [@Skywatcher](https://boards.straightdope.com/u/Skywatcher)\ **Post date:** [June 5, 2001, 5:27pm UTC](https://boards.straightdope.com/t/points-on-a-mortgage-loan-a-farce/67237/26 "2001-06-05T17:27:10Z")
IIRC, my mortgage is 6.5% on a point and a half. According to my brother, the one-time IRS auditor, more points results in quicker accumulation of equity and a larger tax deduction. Having owned the condo only since October, I have yet to build up much equity, thus took just a standard deduction this year. [Previous page](https://boards.straightdope.com/t/points-on-a-mortgage-loan-a-farce/67237.md?page=1)