The longer a taxpayer plans on living in a home without refinancing, the more likely it is that paying points to receive a reduced interest rate on the loan makes economic sense.

Question

Quizplus · Accepted Answer

Paying points upfront to receive a lower interest rate can result in significant savings over time, but it takes time to recoup the cost of the points. The longer a homeowner plans on staying in the home without refinancing, the more time they have to benefit from the reduced interest rate and recoup the cost of the points. Therefore, for long-term homeowners, paying points may make economic sense.

The Longer a Taxpayer Plans on Living in a Home