Author Topic: Mortgage Rates and points  (Read 346 times)

joenorm

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Mortgage Rates and points
« on: November 20, 2020, 06:49:10 AM »
Hello,

I can get a 30 year fixed mortgage at 3.375% with no points or 2.75% with 1.75 points. Looking to refinance $150K

Is there anything else to consider here besides the timeframe of the mortgage? If I plan to hold the mortgage for long enough (~5 years) to pay the points back then the lower rate is obviously better, right?

thanks.

clarkfan1979

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Re: Mortgage Rates and points
« Reply #1 on: November 20, 2020, 07:38:19 AM »
1) If you have this mortgage for your entire life, pay the points for the lower rate.

2) If you are going to sell or refinance within 7 years, avoid the points and take the higher rate.

I didn't run any calculators to come up with the 7 year timeline, so I could be a little off, but this is my "ballpark" answer.

joenorm

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Re: Mortgage Rates and points
« Reply #2 on: November 20, 2020, 08:20:28 AM »
It's hard to know what I will do within 7 (I know this is not exact) years.

I very well may refinance again in that time, but hard to say.

thanks