Mortgage points, also known as discount points, reduce the interest rate you pay on a home loan. While you must pay them upfront, they typically save money over time.
One mortgage point typically costs 1% of your home loan amount. So, if you want to borrow $300,000 to buy a property, one mortgage point would cost $3,000.
As I mentioned, paying a few thousand dollars upfront can save tens of thousands of dollars in the long run.