Borrowers Paying More Discount Points for Mortgage Rates May Not Be Worth It, According to Freddie Mac Research

Higher mortgage rates in 2023 led to an increase in borrowers paying discount points, but the benefits may be limited, says Freddie Mac study.

Facing higher borrowing costs, borrowers paid more discount points to buy down their mortgage rate, but they may not be getting the benefit, according to Freddie Mac’s latest market outlook. 

Freddie Mac’s research, based on closing data from 2023, delves into the dynamics of borrowers paying discount points to secure lower interest rates. Historically, in a low-interest-rate environment, few borrowers opted for discount points. However, as mortgage rates began to climb in early 2022, an increasing number of borrowers chose to pay these points in a bid to reduce their mortgage rate.

Read More in the Original Article National Mortgage Professional