When people want to find out how much their mortgages cost, lenders often give them quotes that include loan rates and points. What exactly is a point?
A point is a fee equal to 1 percent of the loan amount. A 30-year, $150,000 mortgage might have a rate of 7 percent but come with a charge of one point, or $1,500.
A lender can charge one, two or more points. There are two kinds of points: discount points and origination points.