Mortgage option quoted without borrower-paid points, often used as a comparison point for rate tradeoffs.
A no-points loan is a mortgage option quoted without borrower-paid points, often used as a comparison point for rate tradeoffs.
No-points loan matters because many borrowers want to compare a quote without paying extra upfront for a lower rate. It gives the borrower a cleaner baseline for deciding whether paying points is worth it.
The term also matters because no-points does not mean no closing costs. The borrower may still pay lender fees, third-party charges, prepaid items, escrow deposits, or other closing amounts.
Borrowers encounter no-points loan language during rate shopping, especially when comparing a lower-rate quote with Discount Points against a higher-rate quote with less cash due at closing.
The term becomes practical when the borrower wants to separate “I am not paying points” from “I have no costs at all.”
| Choice | Upfront effect | Main borrower question |
|---|---|---|
| No-points loan | Avoids borrower-paid points | Is the rate acceptable without paying points? |
| Discount Points | Higher upfront cost | Will monthly savings justify the points? |
| Lender Credits | Lower cash to close | Is the higher-rate tradeoff worth it? |
| No-Closing-Cost Refinance | Reduces or offsets refinance costs | Where did the costs move instead? |
A borrower compares a 6.375% quote with discount points against a 6.750% quote with no borrower-paid points. The no-points option costs less upfront, but the borrower must decide whether the higher monthly payment is worth the cash savings at closing.
No-points loan differs from Par Rate because par rate is a pricing benchmark, while no-points loan is the borrower-facing option quoted without borrower-paid points.
It differs from Lender Credits because no-points does not necessarily mean the lender is giving credits. It may simply mean the option has no borrower-paid points.
It also differs from No-Closing-Cost Refinance because a no-points loan can still have ordinary closing costs.