Does anyone know how many interest rate points $10K will reduce a new home rate?

Answer 1

It depends on the loan amount. If the loan amount is $100000, as an example: Then one point or $1000 will reduce a 30 year fixed rate approximately one eighth of one percent. Sooooo, $10000 paid in points on $100000 would reduce the rate approximately 1.125%. Instead of the 30 year fixed rate being 6.125%, it would be approximately 5%. These are somewhat rough numbers and each lender will calculate it slightly differently.

Answer 2

** Does anyone know how many interest rate points $10K will reduce a new home rate? **

That depends on the variables involved.

Interest rates are usually set as fixed rate, adjustable rate
or interest only types. Fixed rate with as low an interest percentage as possible is preferred.

Paying down a mortgage of $100,000 by applying the $10,000 to the principal will reduce the mortgage to
$90,000 which saves on interest paid overall.

However points are usually what the lender / bank gets from you for them giving you a loan. One point for the bank on a $100,000 loan says you owe them one thousand dollars.

To pay zero points to the bank and getting the lowest possible interest rate on a home mortgage loan is the best.

Check out the lending tree site. Experiment with their calculator to get an idea of what's involved.

Answer 3

A "point" is equal to one percent of the loan amount ($1000 for every !000,000 borrowed) You are better off shopping rates, paying no more than one point if you must and use the balance for a deposit. Ilowering your principal would save you more than paying a point or two. BTW go for a fixed rate mortgage. Do not be fooled by the variable teaser rates.

Answer 4

10k can be 1 point or 10,
what is the loan amount ?
Asi

Answer 5

I was told 1,000 dollars per point.