How long should you keep a loan before paying points?

Points are a bet on time. The upfront cost is fixed on day one; the savings arrive month by month. So the decision is not "are points good?" but "will I hold this loan long enough for this specific buydown to pay for itself, with margin?"

A practical framework

• Under ~3 expected years: points rarely make sense; look at standard or lender-credit structures.
• Roughly 3 to 7 years: run the break-even; moderate buydowns sometimes win, deep ones usually do not.
• Long-term holds: deep buydowns deserve a serious look, if the cash does not compromise your reserves.

Add margin for real life

People move, refinance, and change plans more often than they predict. A good rule: only pay points when your realistic holding period comfortably exceeds break-even, not when it barely clears it. And remember that a future refinance opportunity resets the clock; points paid today do not transfer to the next loan.