Another very good reason to select a "0" points loan would be when you may expect to refinance your present mortgage or sell the property within a few years. It would be less expensive to have a slightly higher interest rate for a short period than to pay the discount points.

If neither situation applies to you then paying discount points is a better financial choice. As a general rule, each discount point paid to the lender reduces or discounts the interest rate approximately ¼% (.250%).