It’s simple just calculate how much the total payments would be at one rate and then do the same thing at the lower rate, then take the difference between these 2 huge numbers and that is how much you would save over the life of the loan with buying down. Now lets say the ratio of the total cost of payments to the price of the house is 2.37,ballpark figure. If the amount you save divided by the cost of buying down is larger than 2.37 then assuming the economy stays the same over the next 30 years the smart thing would be to buy down. My ratio was 2.37 and the second ratio was 5.3 so I paid the points. A no brainer for me, if the numbers are closer then you have to get out your magic ball and guess what the economy will do over the next 30 years.
