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.