---
title: What are discount points?
description: A discount point or “point” is a one-time fee — calculated as 1% of the loan amount — paid as a closing cost at closing to lower the loan’s interest rate.
---

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# What are discount points?

## A one-time fee to lower the loan's interest rate.

A discount point or “point” is a one-time fee — **calculated as 1% of the loan amount** — to lower the loan’s interest rate. Borrowers can pay discount points **as a closing cost** at closing to **buy down the interest rate** for the mortgage loan.

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