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A point, sometimes also called a "discount point", is one of the important factors in the calculation of the annual percentage rate for a mortgage loan. One point is one percent of the loan amount.
If for a $100,000 loan, the [percentage] points are 1.5, then one pays $1,500 in points because 
.
Discount points are not to be confused with an origination fee. Discount points differ from origination fees in that discount points are used to buy down the interest rates, temporarily or permanently. Origination Fee and Discount Points are both items listed under lender-charges on the HUD-1 Settlement Statement.
The difference in savings over the life of the loan can make paying points a benefit to the borrower. If you intend to stay in your home for an extended period of time, it may be worthwhile to pay additional points in order to obtain a lower interest rate. Any significant changes in fees should be re-disclosed in the final Good Faith Estimate (GFE).
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