The Consumer Financial Protection Bureau said it is monitoring the increase in homebuyers paying “discount points” in recent years.

Details: In a new report, the CFPB said:

  • The percentage of homebuyers paying upfront discount points to lower their interest rate roughly doubled from 2021 to 2023 as rates rose.

  • The increase was greater among borrowers with lower credit scores, with discount points most common among borrowers with cash-out refinances.

  • Borrowers benefit from discount points only if they keep their mortgage long enough that the cumulative monthly savings from the reduced interest rate outweigh the upfront costs.