Answer

How do mortgage points work?

One point costs 1% of your loan amount and buys a lower rate, usually about 0.25% to 0.375% lower. On a $600,000 loan, one point is $6,000.

A lender credit is the opposite: you take a slightly higher rate and the lender pays part of your closing costs.

Break-even: divide the cost of the points by the monthly savings. If you'll keep the loan longer than that many months, points win. Most people in Washington refinance or move within 7 years, so the "lowest payment" option is not always the cheapest one.

The card on this page prices both for your scenario. "Lowest cost" is the zero-point rate; "Lowest payment" shows roughly one point. The difference in payment and the points in dollars are right there.