Discount Points & Break-Even Calculator glossary
Key terms
Point made
These terms describe the upfront-cost choices on a mortgage, each with a primary source.
Last reviewed against the primary sources listed below.
- Discount point
- An upfront fee paid to the lender to get a lower interest rate. Source: CFPB: How should I use lender credits and points (also called discount points)?
- Lender credit
- Money from the lender toward closing costs in exchange for a higher interest rate. Source: CFPB: How should I use lender credits and points (also called discount points)?
- Temporary buydown
- Funds paid upfront to lower payments for the first years of the loan only. Source: Fannie Mae Selling Guide B2-1.4-04: Temporary interest rate buydowns
- Break-even point
- The month when monthly savings from points equal what the points cost. Source: CFPB: How should I use lender credits and points (also called discount points)?