Thinking about spending thousands upfront to buy down your interest rate? Here’s why that strategy might not make sense in today’s market — and what to consider instead.
▶️ Watch the Video
For a quick overview, check out this short video on YouTube:
Should You Buy Down Your Interest Rate in 2025?
Let’s Break It Down:
- Buying a point costs ~1% of your loan amount. On a $500,000 loan, that’s $5,000.
- Savings per month is minimal: A 0.25% rate reduction usually saves about $80/month.
- Break-even time is long: It would take over 5 years to recoup that upfront cost.
- You’ll likely refinance before that. Most buyers don’t keep the same mortgage that long — especially with rates expected to drop.
A Smarter Strategy:
Instead of spending thousands to buy your rate down, save that money for the cost of a future refinance — or apply it to your down payment to reduce your monthly cost without wasting your investment.
Want Help Crunching the Numbers?
I can run a side-by-side analysis of your options so you can make the most informed decision.
Start your application here: Online Loan Application
Schedule a time to chat: Book a time TODAY
Written by John Pyne, SVP Regional Manager and Mortgage Advisor based in Northern Virginia. Specializing in first-time buyers, VA loans, and strategic financing for professionals.