You can. A discount point is money paid upfront in exchange for a lower rate over the life of the loan.

One point equals one percent of your loan amount. It's handled as part of closing costs, and it's a choice you make separately from approval. The reverse exists too: a lender credit raises your rate slightly in exchange for the lender covering part of your closing costs, which helps when cash is tight.

Whether it pays off comes down to one question rather than to how far the rate drops. Will you hold this loan longer than it takes for the monthly savings to repay what you paid upfront? Past that point it's pure savings. Short of it, that difference is a loss. The larger your loan balance, the shorter that period tends to be.

Points also aren't your only option. Putting the same money toward your down payment reduces the loan balance itself and can change your PMI picture. Depending on how the purchase contract is written, a seller credit may offset closing costs instead. Which combination works best varies case by case.

How much a point actually lowers your rate isn't fixed. It shifts with the market, your program, and your loan terms, and it only appears on the rate sheet the day you lock. Separately, whether points are tax deductible depends on your circumstances, so that's worth confirming with a tax professional. We'll run the numbers with points, without points, and with that money used elsewhere, side by side.