When it comes to the Boston real estate market, mortgage points can play a significant role in lowering your interest rate. Mortgage points, also known as discount points, are a form of prepaid interest that borrowers can choose to pay upfront at closing in exchange for a lower interest rate over the life of the loan.

Each mortgage point typically costs 1% of the total loan amount and can reduce the interest rate by around 0.25%. For example, if you have a $500,000 mortgage and decide to buy two mortgage points, it would cost you $10,000 upfront (2 points x $500,000) but may lower your interest rate from 4% to 3.5%.

Deciding whether to buy mortgage points depends on your financial situation and long-term plans. Here are a few factors to consider:

1. Length of stay: If you plan to stay in your Boston property for a long time, buying mortgage points can be beneficial. The longer you hold the loan, the more time you have to recoup the upfront cost through the monthly savings on your mortgage payments.
2. Available funds: Buying mortgage points requires upfront cash. If you have enough funds available, it can be a smart move to lower your interest rate and save money over the life of the loan.
3. Break-even point: Calculate the break-even point to determine how long it will take to recoup the cost of buying mortgage points. Divide the upfront cost by the monthly savings to find out how many months it will take to break even. If you plan to stay in the property longer than the break-even point, buying points may be worthwhile.
4. Current interest rates: Consider the prevailing interest rates in the Boston real estate market. If rates are already low, buying mortgage points may not provide significant savings. On the other hand, if rates are high, buying points can help secure a more favorable rate.

It's important to note that the decision to buy mortgage points should be based on your individual circumstances. Consider consulting with a mortgage professional who can provide personalized advice based on your financial goals and the current market conditions in Boston.

References:

• Consumer Financial Protection Bureau - Mortgage Points
• Bankrate - Mortgage Points