You are buying a $250,000 house and are shopping around mortgage. You plan to finance 80% of the house price via fix-rate traditional mortgage. Your mortgage broker quoted you the $200,000 mortgage loan at 15 years term with an APR at 3.75%. However, he suggested that you consider paying points in exchange of a lower APR at 3.5%. (Note: points are calculated as a percentage of your total loan amount, and one point is 1% of your loan). Assuming the point payment is the only closing cost you need to pay if you choose the lower APR rate. You evaluated that you are likely to sell the house in 8 years. If you need to pay 2 points to lower the APR from 3.75% to 3.5%, should you pay the points? No. paying the points gives the higher effective borrow rate for the 8 years OOO Yes, paying the points gives the lower effective borrow rate