If you keep the mortgage for 30 years it is generally worth it, but almost no one does this for either their home or investment property. If you sell the property in 3 months it doesn’t make sense to pay $10k in points to get a $170 monthly savings. The question is: How long do you need to have the mortgage to make paying that fee (the points) worth it - considering the time-value of money?
Article Also Covers:
How to calcluate the net present value of the bank’s offers
How banks calculate their offers
Estimating how long will you keep the mortgage
The rate of return on alternative uses for the funds
Multi-decade tax planning and mortgage points
