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What are points on a Loan Estimate?
Updated November 2026 · Every dollar figure is an illustrative example, not a quotePoints are interest you pay up front to get a lower rate, and one point is 1% of the loan amount: $3,800 on a $380,000 loan. They are the first line of Section A, printed as a percent of the loan, and they are the one line in that section that buys something, a lower rate for as long as you keep the loan.
Where it is on the form
Page 2, the first line of Section A, Origination Charges, printed as '__ % of Loan Amount (Points)' with the dollar figure beside it. If the line is blank or 0%, you are paying no points at that rate. A negative number does not appear here; a credit for taking a higher rate shows at the bottom of Section J as Lender Credits.
Most quotes carry between zero and two points. Each point commonly lowers the rate by around an eighth to a quarter of a percent, but the trade varies by lender and by day, so the only reliable way to see what a point buys is to ask the same lender for the rate with and without it.
The math behind a point is a break-even. You pay a known sum today and save a known amount each month. Divide the one by the other and you have the month the point pays for itself; keep the loan past that month and the point was worth buying. Are mortgage points worth it? works the full calculation with two points on $380,000.
Some lenders label their own origination charge as 'origination points' or 'discount points' when it buys no rate reduction at all. The form's label is what matters: only the % of Loan Amount line is a true point. Anything else in Section A is a fee.
Can you shop for it?
Not as a service, but the trade is entirely the lender's to set, and it is the most shoppable number on the form. Two lenders can quote the same rate with very different points, or the same points with very different rates. Ask each lender for a quote at the same rate, or at zero points, so the comparison is clean.
Can it change between the Loan Estimate and closing?
Points are a lender charge, so they cannot go up at closing on their own. They can change with a revised Loan Estimate when the loan changes (the amount, the appraised value, your credit) or when you lock, because an unlocked rate and its points float with the market until the lock. Once locked, the points on the lock confirmation are the points at closing.
A worked example (illustrative)
A $380,000, 30-year fixed loan. One lender quotes 6.625% with no points; the same lender offers 6.375% for one point. The figures are made up to show the math.
| Quote | Rate | Points | Monthly P&I |
|---|---|---|---|
| No points | 6.625% | $0 | $2,433 |
| One point | 6.375% | $3,800 | $2,371 |
The point saves about $62 a month and costs $3,800, so it pays for itself in about 61 months, just over five years. Keep the loan longer than that and it was worth buying. Sell or refinance sooner and the no-point quote was the better one.
Questions to ask the lender
- What is the rate at zero points, and what is the rate at one point? (That tells you what a point is worth with this lender.)
- Are these discount points that lower my rate, or an origination charge you are calling points?
- If I lock today, are the points on the lock the points I will see on the Closing Disclosure?
Red flags
- Points on the Loan Estimate but a rate no lower than another lender's zero-point quote on the same day.
- A quote described as 'no points' whose Section A still carries a percent-of-loan charge under another name.
- Points that rise on the Closing Disclosure with no change to the loan and no revised Loan Estimate explaining why.
Questions people ask
How much is one point on a $380,000 mortgage?
$3,800. A point is always 1% of the loan amount, not of the home's price. Two points on the same loan is $7,600, and a half point is $1,900.
How much does one point lower the rate?
Commonly around an eighth to a quarter of a percent, but it is not a fixed exchange. The same lender may give more rate per point on one day than the next, and the second point often buys less than the first. The only reliable answer is the lender's own quote with and without the point.
Are points tax deductible?
Points on a purchase loan for your main home are often deductible as prepaid interest in the year you pay them, and points on a refinance are usually spread over the life of the loan. That is a tax question for a tax professional, not a lender; the rules depend on your filing and on how the points were paid.
Only have one quote? That's the problem.
Tell us the rate and the fees you were quoted. It is free, there is no credit pull, and nobody calls you. We check whether another lender beats it, fees included. Or start with the free Loan Estimate checker, which reads your rate, points and Section A and flags anything out of the ordinary.
Check my quoteEvery dollar figure on this page is illustrative. Fee ranges are general observations, not a survey or a quote, and are not a loan offer, approval, commitment to lend, or Loan Estimate. Your actual rates and fees depend on qualification with lenders, your state and county, and your closing date. The tolerance rules described are the federal TRID rules in general terms; the rule itself and your own Loan Estimate and Closing Disclosure decide how it applies to your loan. comparemyloan does not negotiate with lenders, lock rates, or take loan applications.