Discount points, lender credits and buydowns, weighed on your own numbers
Points and taxes
Point made
The IRS treats points as prepaid interest. If you itemize, points on a loan to buy or build your main home may be fully deductible in the year paid when IRS tests are met; points on a refinance are usually deducted over the life of the loan. Topic 504 and Publication 936 have the details; a tax professional can apply them to you.
Last reviewed against the primary sources listed below.
Questions for a tax professional
- Do I itemize, or take the standard deduction?
- Do my points meet the tests for deducting all at once?
- How are refinance points spread out?
Points and credits, answered
Can you deduct mortgage points on a refinance?
Generally they are deducted over the life of the loan rather than all at once, according to the IRS.