Mortgage points, also called discount points, are prepaid interest: you pay a fee at closing in exchange for a lower rate over the life of the loan. One point equals 1% of the loan amount, so a point on a $300,000 loan costs $3,000. Buying points makes sense only if you hold the loan long enough for the monthly savings to exceed the upfront cost, the so-called break-even point, which is often several years out.
Discount points are distinct from origination points, which are a fee for making the loan rather than a rate buy-down. There is also a tax dimension worth knowing generally: points paid on a rental-property loan are typically deducted over the life of the loan rather than all at once, unlike some points on a primary residence. Because treatment depends on the property and loan, confirm the specifics with a tax professional. This is general education, not tax advice.
This is general educational information, not legal or tax advice. Rules vary by state and locality and change over time — check your local law and confirm specifics with a qualified professional.