The other realtors have done a good job in explaining that it takes 3-5 years in general to pay off points. You would have to see the difference in the payment and whether it was worth it overall buying down the interest rate and how long you plan to stay in the home. You have to be careful about mortgage agents telling you that they will refinance you for free in one or two years to get a better rate, etc. because then paying the points just became redundant --you are starting from scratch all over again. You must stay in the same loan to take advantage of the buy down points paying themselves off in 3 years or so.
If you really figure out that you are prepaying interest at today's dollars instead of over the next five years - that has another impact but the points are tax deductible in the year you pay them. Okay, it gets really complicated. Best to figure out if you need the write-off now or for future earnings It's best to talk to your accountant. They may shed some light on whether it's worth it - since that was your question.
Good luck.
Sandra Bolcar
RE/MAX VILLAGE SQUARE
Upper Montclair, NJ
973-744-7722
sandra@thecrosskeysteam.com

Julio Sean is right need a little more information but here is a suggestion. Points are just prepaid interest. So you know what the cost is for each point, you just need the difference in the mortgage payment. Divide the cost by the differnce in payment to see how long you need to recoupp your money. For example today a 30 year fixed rate loan of $250,000 was at 6% no points, no origination fee =$1498.88 payment, for a 1.25% (points the rate goes down to 5.625%. payment = $1439.15. So the cost $250k x 1.25% = $3125. / $59.73 (1498.88-1439.15) = 52.32 months So that means you will have to be in this loan for 4 years, 5 months in order to get your money back. I hope this helps you out Julio.

I would really need more information about the deal in order to tell you ether or not you should be paying points on your new loan. In many cases is does make sense (if the broker or bank is doing the right thing). You can contact me directly and in strict confidence at sanderson@mtgexpress.biz.

Depends who is paying for them, you or the seller? If it's the Seller, definately worth it because you will get a lower interest rate therefore a lower payment. Also how long are you planning on keeping the home? Example if you are only going to be there for 2 years and it will take you 5 years to recoup the money you (buyer paying) paid then no it is not worth it.