Mortgage Points
Mortgage points are upfront charges expressed as a percentage of the loan amount; discount points specifically purchase a lower offered interest rate.
Mortgage-pricing terms for discount points, origination charges, lender credits, and yield-spread compensation.
Points, Origination, and Yield-Spread Fees explains how mortgage pricing moves costs between closing and future payments. Mortgage Points covers discount points, percentage-based origination charges, lender credits, payment savings, and break-even analysis. Yield Spread Premium explains older mortgage-pricing and broker-compensation language.
These concepts sit inside Payments, Points, Insurance, and Closing Costs. Use the broader section when the decision also depends on mortgage insurance, escrow, prepaid interest, settlement services, or payment structure.
| Term | Finance question |
|---|---|
| Discount points | How much upfront cost purchases a lower offered interest rate? |
| Origination charge | What does the lender charge to make, process, underwrite, or fund the loan? |
| Lender credit | How much eligible closing cost is offset, and what higher rate or other condition funds it? |
| Yield spread premium | How did historical above-par pricing create value used for compensation or cost offsets? |
Compare the Loan Estimate, Closing Disclosure, interest rate, APR, lender charges, credits, monthly payment, cash to close, and cost over a realistic holding period. A lower rate is not automatically the lower-cost choice when it requires substantial points.
This section provides financial education, not a live mortgage quote, lending recommendation, or personalized tax or legal advice.
Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.
Mortgage points are upfront charges expressed as a percentage of the loan amount; discount points specifically purchase a lower offered interest rate.
Yield spread premium is lender-paid broker compensation tied to a loan rate above a baseline or par pricing level.