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Lender Points

Definition of term

Lender points are a type of fee that lenders may charge to borrowers. "Origination points" or "discount points" are other terms for lender points. One lender point is equal to one percent of the loan amount. So, for example, if you're taking out a $200,000 loan, one lender point would cost you $2,000. Lender points are paid upfront and can be used to buy down the interest rate on your loan. Lender points are optional, so it's up to the borrower to decide whether or not they are worth the cost.

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