Does paying mortgage points to lower my rate make sense?

It can, but only if you stay in the loan long enough to break even. A discount point costs 1% of your loan amount and typically lowers your rate by about 0.25%, reducing your monthly payment. To decide, divide the upfront cost by the monthly savings to find your break-even month — if buying one point costs $4,000 and saves $60 a month, you break even in about 67 months, or roughly five and a half years. Buy points only if you'll keep the mortgage well past that point; if you might move or refinance sooner, you'd lose money. Points can also be worth considering if you have extra cash and want a lower long-term payment. The opposite move is a lender credit, which raises your rate to cut upfront costs. Ask your lender for a side-by-side comparison of paying points, paying par, and taking a credit.