Should I pay discount points on a conventional loan?
Depends on the hold period. Each point is roughly 1% of the loan amount upfront and typically buys 0.25% lower rate (varies by day and lender). Break-even is the upfront cost divided by the monthly P&I savings. Long holds favor points; short holds favor lender credits.
Plain-English explanation
On a $400k loan, 1 point is ~$4,000 upfront. If that cuts the rate by 0.25% and saves $60/month in P&I, break-even is around month 67 (~5.5 years). Hold past 5.5 years and points pay off; sell or refinance sooner and lender credits or no-point pricing win. Run the math against your actual hold expectation. Subject to lender pricing.
What can change the answer?
Title and escrow fees, Florida doc stamps, intangible tax, prepaids, lender fees, and any seller or lender credits can change cash to close.
Want the real answer for your conventional file?
Conventional guidelines are the rule. Your credit, income, DTI, PMI, LLPAs, and Florida payment math are what decide the actual answer.
More conventional questions on Closing Costs
Educational only. Conventional loan guidelines, lender overlays, rates, fees, PMI, LLPAs, and underwriting requirements can change. Final eligibility depends on full underwriting review.