Down Payment vs. Points vs. Permanent Buydown: Which Option Saves More on a New Build?

You’re staring at a new-build contract, the lender’s rate sheet, and a builder incentive that sounds great on paper—if you knew the smartest way to use it. Do you put more cash into the down payment, buy points to reduce the rate, or ask for a permanent buydown that drops your monthly payment for the life of the loan? I’ve sat in dozens of builder finance meetings with buyers juggling exactly this question. The “right” answer isn’t one-size-fits-all, but there’s a clear framework that helps you choose the option that saves the most money—and keeps you comfortable when interest rates, appraisals, and construction timelines move around.

The Three Levers, Plain and Simple

Let’s clear up definitions so we’re comparing apples to apples.

• Down payment: The portion of the purchase price you pay upfront. Bigger down payment lowers your loan amount, can change your loan program, may Eliminate PMI, and can help you avoid jumbo loan pricing. It doesn’t change the interest rate (unless it crosses a pricing tier like 20% or 25% down).

• Points (discount points): You pay an upfront fee (usually 1% of the loan amount per “point”) to reduce your interest rate. The value of a point varies daily by lender. A common rule of thumb is roughly 0.25% rate reduction for 1 point, but I’ve seen it range from 0.125% to 0.375% depending on market conditions and your profile.

• Permanent buydown: This is just buying points with the explicit goal of permanently lowering the rate. Builders and lenders often label it “permanent buydown” to distinguish it from a temporary buydown (like a 2-1 buydown) that only lowers your payment for the first one to three years. In this article, “points” and “permanent buydown” are essentially the same idea.

Temporary buydowns can be helpful if you expect to refinance soon, but they don’t change your total interest cost over the life of the loan. The focus here is permanent savings and long-term math.

How New Construction Changes the Math

Buying a new build isn’t the same animal as buying a resale home. The timing and incentives make a big difference:

• Long timelines: Your home might be six to 12 months out. Locking a rate that long can be expensive. Some buyers burn cash on a long lock when they would’ve been better off waiting and using funds on points instead.

• Builder incentives: Builders often offer $5,000–$30,000 (sometimes more) in credits if you use their preferred lender. That money typically can be used for closing costs and points. Sometimes you can negotiate to apply it as a price reduction, but many builders prefer preserving comps and won’t lower base price. That pushes you toward using credits for rate buydowns or closing costs.

• Appraisal sensitivity: A permanent rate buydown doesn’t care about the appraisal value. Throwing extra cash into upgrades or “extras” can backfire if an appraisal comes in light and you need more cash to close. Strategic use of credits on points can be safer.

• Rate volatility: Rates can swing meaningfully over a 6–9 month build. If you suspect a refi window is opening within a couple of years, it changes whether points make sense.

My rule on site with clients: don’t commit dollars until you’re clear on your horizon, your PMI situation, and whether your loan sits on a pricing cliff (like jumbo versus conforming).

Down Payment: More Than Just “Lower Payment”

A bigger down payment does a lot of quiet heavy lifting.

• Eliminates or reduces PMI: On conventional loans, PMI drops off at 80% loan-to-value (LTV) and cancels automatically at 78%. Hitting 20% down opens doors. You can also use single-premium PMI instead of monthly—sometimes smarter than points.

• Unlocks pricing tiers: Conventional loans get better pricing as LTV drops (95% to 90% to 85% to 80% to 75%). Hitting the next tier can lower your rate even without points.

• Avoids jumbo rate penalties: For 2024, the baseline conforming loan limit is $766,550 in most counties (higher in some high-cost areas). If your loan amount falls under conforming limits, you typically get better pricing and more flexible underwriting. If a little extra down payment keeps you conforming instead of jumbo, that’s often a huge win.

• Lowers risk and monthly obligation: Smaller loan = smaller payment and more flexibility.

• Cash trade-offs: That cash becomes illiquid housing equity. You won’t tap it easily without a refi or HELOC. If you’re light on reserves, don’t empty the tank just to shave your payment by a few bucks.

When extra down payment shines

• You’re crossing a meaningful threshold: hitting 20% down to kill PMI, 25% down for better pricing, or staying under the conforming cap.

• You’re in a high-rate, uncertain period and might refinance within two to three years. In that case, points may not pay back quickly, while extra down is always useful.

• You need breathing room on debt-to-income (DTI) to qualify. Lower payment helps the approval.

Points and Permanent Buydowns: Guaranteed Rate Cut, Conditional Value

Buying points is a pure math play plus a time-horizon bet.

• How the pricing works: Lenders publish rate sheets with “par” rates (no points, no credits) and a schedule of costs to move rates up or down. Sometimes one point gets you 0.25% lower, other times just 0.125%. It changes daily.

• The breakeven: Divide the upfront cost by your monthly payment savings to estimate how many months it takes for points to pay for themselves. If you’ll keep the loan longer than that, points are attractive.

• Refi risk: If you refinance before your breakeven month, you usually lose. The upfront cost doesn’t come back.

• Tax angle: Points on a primary home purchase are often deductible in the year paid if you itemize and meet IRS rules. If you don’t itemize, the deduction may be moot. Ask your tax professional—this can shift the math.

Typical breakeven ranges I see

• 1 point for a 0.25% rate drop: breakeven around 4.5 to 6.5 years.
• 2 points for a 0.5% drop: similar breakeven because the effect scales linearly in many markets.
• If the lender’s pricing day is “stingy” (1 point only buys 0.125%), breakeven can stretch past 8 years. Not worth it unless you’re positive you’ll hold long-term.

A note on temporary buydowns

A 2-1 buydown lowers your rate 2% in year one and 1% in year two, then it snaps back to the original rate. It’s great for short-term payment relief, especially if a builder is funding it. It doesn’t reduce total interest the way a permanent buydown does. If the builder gives you a choice, I prefer permanent buydown for long-term savings—unless you’re likely to refinance within two years.

The Math That Actually Decides It

Let’s run a clean example. We’ll stick to principal-and-interest and assume taxes/insurance stay the same so we can compare the levers.

Scenario A: $600,000 new build, 20% down

• Price: $600,000
• Down payment: $120,000 (20%)
• Loan amount: $480,000
• Rate without points: 7.25% (30-year fixed)
• Monthly principal and interest (P&I): about $3,276

Option 1: Buy 1 discount point

• Cost: 1% of loan = $4,800
• New rate: assume 7.00% (a 0.25% drop)
• New P&I: about $3,195
• Monthly savings: $81
• Breakeven: $4,800 / $81 ≈ 59 months (about 5 years)

Option 2: Put the $4,800 into down payment instead

• New loan amount: $475,200
• Rate: 7.25%
• New P&I: about $3,243
• Monthly savings versus original: $33
• Breakeven compared to points: Points clearly save more per month in this 20%-down, no-PMI scenario, as long as you keep the loan 5+ years.

Option 3: Do nothing and keep the cash

• Cash in hand has value: If you invest $4,800 at 5% after tax, that’s ~$240/year, or $20/month. Not massive, but liquidity matters if you’re light on reserves.

Key takeaway from this example: When you’re already at 20% down and aren’t unlocking a new tier, points often produce more monthly savings per dollar than a small extra down payment. But if you think you’ll refinance within 2–3 years, points likely won’t pay back.

Case Studies From Real Buyer Situations

These are composites of actual projects and buyer profiles I’ve worked on.

Case 1: 20% down buyer debating points vs. more down

• Purchase: $750,000
• 20% down: $150,000
• Loan: $600,000
• Par rate: 7.125%
• 1 point cost: $6,000 for a 0.25% rate drop to 6.875%
• P&I at 7.125%: around $4,044
• P&I at 6.875%: around $3,945
• Savings: ~$99/month
• Breakeven: $6,000 / $99 ≈ 60 months (5 years)

If the buyers expect to stay put for 8–10 years, points are reasonable. If their company moves people every 3–4 years, I’d lean against points and suggest they keep liquidity or use the cash to furnish the home and maintain strong reserves. Most of their risk (job mobility) works against paying points.

Case 2: 10% down buyer with PMI

• Purchase: $500,000
• Down: $50,000 (10%)
• Loan: $450,000
• Par rate: 7.25%
• Monthly PMI estimate: $120–$170 (depends on credit, insurer; assume $150 for this example)
• Builder credit: $10,000

Options:

• Use credit to buy down rate permanently: Say 1.5 points reduce rate to 6.875% (point value varies). Cost ~$6,750, still $3,250 left for other costs. New P&I savings might be around $120/month. PMI still $150/month. Total monthly improvement ~$120.
• Use credit for a single-premium PMI buyout: Some insurers will take a one-time fee (say $5,000–$7,500) to eliminate monthly PMI entirely. If your monthly PMI is $150, that’s $1,800/year. Paying $6,000 to kill it has a 3.3-year breakeven, and the savings are immediate. You can use the remaining builder credit for a small rate buydown or closing costs.
• Increase down payment to 12%: You’d need your own cash; the builder credit typically can’t be used as down payment. Moving from 10% to 12% might trim PMI to, say, $120/month, which is a small win compared to eliminating PMI altogether.

What I usually recommend here: If the builder allows, use credits to eliminate the PMI first (via single-premium) because it produces guaranteed savings regardless of future refis. Then, put any extra toward a modest permanent buydown. If single-premium PMI pricing is poor that day, you can do a permanent buydown first, but price the PMI options side-by-side.

Case 3: $20,000 builder incentive—where does it do the most good?

• Purchase: $640,000
• Buyer has 20% down
• Par rate: 7.375%
• Choices: $20,000 in design center upgrades, permanent buydown, or closing costs

What I see save the most over time:

• Use $12,800 (2 points on a $640,000 x 80% = $512,000 loan) to lower rate from 7.375% to roughly 6.875% (assuming 0.25% per point). That can cut P&I by roughly $165–$190/month. Breakeven still ~5 years.
• Use remaining $7,200 for title, lender fees, prepaid taxes/insurance. Keep your own cash untouched for reserves and flexibility.

If the buyers were sure they’ll sell in 3–4 years, I’d suggest the opposite: take a 2-1 temporary buydown funded by the builder and put the rest toward closing costs. Don’t spend on permanent points you won’t recoup.

Case 4: Straddling conforming vs jumbo

• Price: $900,000
• 20% down: $180,000
• Loan: $720,000 (this exceeds the baseline conforming limit in many areas)
• Jumbo pricing at 7.25% versus conforming 7.00% with points options

If the buyers can add $20,000 more to down payment (or negotiate a price reduction) to bring the loan to $700,000—but still above conforming—no change in program. However, if they can get the loan under the conforming cap for their county (say the local conforming limit is $766,550; here they’re over anyway), the pricing may improve enough to beat the value of points.

This is one of the biggest mistakes I see: paying points on a jumbo loan when just a little more down would have kept you conforming and saved more every month without an upfront cost. Always check where your loan sits relative to your county’s conforming limit before you buy points.

Case 5: Investor buying a new-build townhouse

• Purchase: $420,000
• 25% down (common requirement for investment property conventional)
• Loan: $315,000
• Rates for investments often price higher than primary homes. Points can be expensive and breakevens longer.
• Vacancy and cash flow matter more than small payment differences.

For investors, I usually prioritize:

• Keep liquidity. Tenants change, AC units die, markets wobble.
• Use down payment to meet program minimums and keep DTI/paperwork clean.
• If the builder gives credits, consider permanent buydown only if you plan to hold long-term and the rent supports it. Otherwise, use credits to cover closing costs and improve cash-on-cash returns.

The PMI Angle: The Silent Swing Factor

With less than 20% down on conventional loans, PMI can dominate the decision.

• Monthly PMI ranges: On strong-credit buyers putting 5–15% down, PMI might run anywhere from $60 to $250 per month on a $400,000–$500,000 loan. The exact cost depends on credit score, LTV, and insurer pricing that week.

• Single-premium PMI: Pay a lump sum at closing to eliminate monthly PMI. The lump sum can often be paid by a builder credit. This can be a better use of credits than buying points if the breakeven is shorter.

• Lender-paid PMI (LPMI): The lender raises your interest rate instead of charging PMI. Payments look clean, but you’re paying via a higher rate. It can be smart if you’ll keep the loan a long time and the rate bump is small; it can be a trap if you plan to refinance soon.

• FHA and VA:
• FHA requires upfront and annual mortgage insurance (MIP), regardless of down payment below certain thresholds. If you’re FHA-bound due to credit or DTI, permanent points may give you the only lever for payment reduction beyond putting significantly more money down. FHA seller concessions can cover discount points up to program limits (often up to 6% interested party contributions).
• VA loans have no PMI but do have a funding fee (waived with qualifying disability). Discount points are allowed; seller concessions have specific caps and rules. Builder-paid points need to fit VA guidelines—have your lender structure it properly.

PMI elimination is one of the few areas where I’ll choose down payment over points even when points show higher monthly savings—because PMI savings are immediate, risk-free, and stick even if you refinance later.

Don’t Forget Taxes, Closing Costs, and Cash Reserves

• Points deductibility: On a primary residence purchase, discount points are often deductible in the year paid if you itemize and meet IRS criteria. If you’re in the 24% bracket and pay $8,000 in points, the after-tax cost could be roughly $6,080. If you take the standard deduction, that benefit disappears. Ask your CPA before you decide.

• Mortgage interest deduction: With the higher standard deduction and the $10,000 cap on state and local taxes, fewer buyers itemize than a few years ago. The tax value of a lower rate is not always as big as people expect.

• Closing costs: On new builds, expect $8,000–$20,000 in closing costs and prepaids depending on price, taxes, and escrow setup. Builder credits are perfect for this. Don’t drain your own cash if the builder will foot the bill.

• Reserves: I like to see 6 months of PITI (principal, interest, taxes, insurance) after closing—12 months if your income is variable. A house will find a way to spend your last dollar. If paying points erodes your reserves, that’s a red flag.

How Long Locks and Construction Timing Affect Your Strategy

• Long-term rate locks: 120–360-day locks are common for new builds. Expect a cost—sometimes 0.25 to 1.0 points or a rate premium. Extensions usually cost extra.

• Float-down options: Some lenders offer a one-time float-down if market rates fall by a certain amount before closing. That can reduce the regret factor of not waiting, but read the fine print—there’s often a fee and strict timing.

• Lock versus points: If your builder offers a long timeline, consider spending on a reasonable long lock with a float-down feature and saving points for later. Or wait to lock until 60 days out and use funds for a permanent buydown then, if your risk tolerance allows.

• Appraisal timing: Some lenders won’t order the appraisal until the home is near completion. If you’re borderline on price-to-appraise, keep cash on hand. Don’t pre-commit dollars to points until you’ve mapped this out with your lender.

The Step-by-Step Decision Playbook

Here’s how I walk clients through the decision.

1) Nail down your loan program and key thresholds

• Are you conventional, FHA, VA, or jumbo?
• Where is your LTV? Are you at 5%, 10%, 15%, 20%, 25% down?
• Are you near the conforming loan limit for your county?
• Is PMI in play? If so, get exact quotes for monthly PMI and single-premium PMI.

2) Get a live rate sheet with a point/rate grid

• Ask your lender: “What’s par today for my profile, and what does 0.5, 1, and 2 points buy me?”
• Ask them to show both monthly payment and total cost of points.

3) Calculate real breakeven, not just rule-of-thumb

• Breakeven months = (Points cost) / (Monthly payment reduction).
• If the breakeven is longer than your expected time in the loan, skip the points.

4) Compare to extra down payment at the current rate

• What’s the payment change if you add the same dollars to your down payment instead?
• Does the extra down move you to a better pricing tier, eliminate PMI, or keep you conforming? If yes, that’s a hidden win.

5) Check tax impact with your CPA or a credible calculator

• Will you itemize? If not, don’t count on point deductibility.
• If you will itemize, estimate the after-tax cost of points.

6) Stress-test your plan

• What if rates drop 1% in 18 months and you refinance? Points may be wasted.
• What if the appraisal is short and you need extra cash? Liquidity beats a slightly lower payment.
• What if you overestimate your time in the home? Job changes and kids have a way of changing plans.

7) Prioritize builder credits

• Use credits first for: PMI elimination (if pricing is favorable), permanent buydown (if breakeven fits), and closing costs.
• Don’t spend credits on flashy upgrades if the financial levers create bigger lifetime savings—unless the upgrades are truly worth it to you.

8) Make the call—and keep a plan B

• If you buy points, choose a breakeven you’re comfortable with (I like ≤5 years).
• If you go heavier on down payment, keep strong reserves and an emergency fund.
• If you do neither, have a clear reason (e.g., plan to refinance soon; want maximum liquidity).

Rules of Thumb That Usually Hold Up

• If you’re below 20% down, first look at PMI strategies. Eliminate or reduce PMI before buying points, unless the PMI pricing is already minimal and the points offer an obvious win.

• If your expected time in the loan is under 5 years, permanent points usually don’t pencil out. Consider a temporary buydown funded by the builder and keep your cash.

• If you’re one step away from a better LTV tier (especially 20% or 25%), consider extra down payment to cross the line. The rate improvement plus possible PMI savings beat small rate buydowns.

• If you’re near a conforming/jumbo border, prioritize staying conforming over buying down a jumbo rate.

• Build in cushion. New construction has moving parts. Don’t commit every spare dollar to points.

Common Mistakes I See Buyers Make

• Paying points when they’re very likely to refinance soon. If you think rate relief is coming in 12–24 months, let the builder fund a temporary buydown or cover closing costs instead.

• Ignoring PMI math. An extra $5,000–$8,000 in single-premium PMI can eliminate a $150/month fee. That’s powerful and permanent.

• Assuming 1 point always buys 0.25%. Some days it’s worse. If you’re paying 1 point for only a 0.125% drop, the breakeven is often too long.

• Draining cash for a tiny monthly reduction. I’d rather see you hold a solid reserve than chase an extra $40/month in savings.

• Not checking the conforming limit. I’ve watched buyers drop thousands on points to lower a jumbo rate when a slightly bigger down payment would have kept them conforming and saved more.

• Overlooking taxes. If you won’t itemize, points may not be deductible. Don’t let a fake tax benefit sway you.

Real-World Numbers: A Few More Walkthroughs

Let’s layer in different price points and conditions.

Example 1: $450,000 purchase, 5% down

• Loan: $427,500
• Par rate: 7.375%
• Monthly PMI estimate: ~$160
• 1 point cost: $4,275 for ~0.25% rate reduction
• New rate: ~7.125%. P&I drop ≈ $65–$75/month.
• If you use $4,275 to buy single-premium PMI instead (if priced at, say, $4,500–$6,000), you might eliminate $160/month immediately. That’s a 2.5–3.5 year breakeven and it stays gone even if you refinance later. In many cases, that beats points by a mile.

Example 2: $800,000 purchase, 25% down

• Loan: $600,000 (conforming in many areas)
• Par rate: 7.125%
• 2 points: $12,000, rate to ~6.625%
• Payment savings: roughly $190–$220/month. Breakeven ~5–5.5 years.
• Extra $12,000 down: Payment savings maybe $40–$45/month.
• If the buyers plan to hold 10+ years, I favor the permanent buydown here. If they expect to move in 3–4 years, I’d skip points.

Example 3: Builder offers 3% of price in credits on a $700,000 home ($21,000)

• Buyer has 15% down
• Mix and match:
• Allocate $7,000 to single-premium PMI and eliminate $130–$180/month PMI.
• Allocate $10,500 (two points on a $595,000 loan) to drop rate ~0.50%, cutting P&I by ~$170–$200/month.
• Use the remaining $3,500 on prepaids and title.
• Combined monthly savings could be $300+ with zero out-of-pocket beyond your down payment. That’s how you put builder incentives to work like a pro.

What About Refinancing Risk and Prepayments?

• If you plan to make extra principal payments, the relative value of points diminishes slightly. You’re paying the loan down faster, so the long-term interest saved from a lower rate is less dramatic.

• If you plan to refinance when rates fall, points are a timing bet. Consider modest points (≤1) if the breakeven is short, or skip them altogether and take a builder-paid temporary buydown instead.

• Locking in the payment you can live with matters psychologically. If points get you to a comfortable “sleep at night” number and you plan to stay put, that has value beyond spreadsheets.

Special Situations to Flag With Your Lender

• VA loans: Confirm how builder-paid points and concessions will be treated. There are caps and definitions that matter. Your lender should structure it correctly so you meet VA guidelines without running afoul of the 4% seller concession limits and related rules.

• FHA loans: Builder credits can cover discount points and closing costs up to program limits (FHA limits interested party contributions to 6% of the sales price). FHA MIP makes PMI strategy less relevant; you’re comparing down payment versus points more directly.

• New construction contingencies: If your rate lock expires due to delays, what are your extension options and costs? Clarify in writing.

• Appraisal and spec changes: If you add upgrades late in the build, double-check the appraisal risk. Don’t rely on points if there’s a chance you’ll need extra cash to bridge an appraisal gap.

A Simple Framework To Decide: Three Questions

When clients get stuck, I ask them these three questions:

1) What’s your realistic time-in-loan?

• If you’re under 5 years, points usually don’t pay back. Use credits for closing costs or a temporary buydown, and keep flexibility.

2) Is PMI in play—or can you cross a program tier?

• If yes, prioritize strategies that eliminate PMI or move you to a better LTV tier, then consider points.

3) How’s your cash cushion after closing?

• If points drain reserves below 6 months of PITI, I get nervous. Keep your rainy-day fund intact; homes and life happen.

Pro Tips From the Field

• Ask for a multi-option quote on the same day. Rates and point values move daily. Get your lender to show you par, 0.5-point, 1-point, and 2-point options side-by-side.

• Price single-premium PMI every time you’re under 20% down. It’s often a better use of credits than points, especially if you’ll hold the home for at least 3 years.

• Use builder credits before your own cash. If the builder is giving you $15,000, put it to work on permanent value—PMI elimination, permanent buydown, and closing costs.

• Watch the conforming limit. If a small down payment increase keeps you conforming, that often beats buying points on a jumbo loan.

• Float-down clauses are worth asking about on long locks. They’re not free, but they can limit regret if rates improve near closing.

• Keep an eye on extension fees. If you lock too early and the home delays, you could pay for lock extensions. Sometimes waiting to lock and reserving cash for a permanent buydown is smarter.

• Revisit the math 45–60 days before closing. Market pricing changes. What didn’t pencil out four months ago might be a slam-dunk now—or vice versa.

A Few Quick Q&As

• Should I always buy points if I’ll be here 10 years? Not always. If you’re under conforming limits and the lender’s point pricing is generous, yes, points often make sense. But if that day’s pricing is weak (1 point buys just 0.125%), the breakeven can stretch. Always run the numbers.

• Are upgrades ever a better use of the builder credit? If you’re in a neighborhood where resale hinges on certain features (e.g., covered patio, third garage bay), and you’ll hold for years, the resale value and personal utility could outweigh the financial gain of points. But this is lifestyle value, not pure dollars. Just make a conscious choice.

• Can I split credits between a temporary buydown and a permanent one? Often, yes. I’ve structured deals with a builder-funded 2-1 buydown and a small permanent buydown. It gives short-term breathing room and a modest lifetime reduction.

• What’s a reasonable breakeven target? Under 5 years is my comfort zone for owner-occupants planning to stay long-term. For investors or anyone with uncertain timelines, I prefer ≤3–4 years.

Putting It All Together: A Realistic Path You Can Follow

• Step 1: Get preapproved with two lenders: the builder’s preferred lender and an outside lender. Ask both for full point/rate grids and PMI options if applicable.

• Step 2: Identify thresholds. Are you near 20% down, 25% down, or a conforming limit? Map the math of crossing those lines.

• Step 3: Decide your time horizon in this loan. If you can’t say “very likely 7+ years,” be cautious about heavy points.

• Step 4: Price single-premium PMI if you’re under 20% down. Compare it to monthly PMI and LPMI.

• Step 5: Use builder credits strategically. PMI elimination first if advantageous, then permanent buydown, then closing costs. Avoid using your own cash for things the builder will pay.

• Step 6: Preserve reserves. Keep at least 6 months of PITI in the bank post-closing. If points threaten that, back off.

• Step 7: Re-check numbers 45–60 days from closing and lock with a plan. If you do a long lock early, negotiate a float-down and understand extension costs. Otherwise, lock closer to completion and deploy credits then.

• Step 8: Document your choice and why. When rates move or someone at a BBQ tells you they did it differently, you’ll have the logic behind your plan.

The Bottom Line You Can Use

• Down payment is king when it erases PMI, unlocks a better LTV tier, or keeps you under conforming limits. Those wins often beat points.
• Permanent buydown via points shines when you’ve already solved PMI, plan to keep the loan 5–10 years, and the lender’s pricing gives you at least ~0.25% per point.
• Builder credits are most powerful when they fund PMI elimination, a solid permanent buydown, and your closing costs—so your own cash stays liquid.
• Long construction timelines push you to be patient, protect your lock, and re-run the numbers close to closing.

If you want a quick heuristic:

• Under 20% down? See if credits can kill PMI first.
• At or above 20%, with a 7+ year horizon and decent point pricing? Consider permanent points.
• If you’re likely to refinance within 2–3 years or need strong reserves, skip heavy points and use credits for closing costs or a temporary buydown.

I’ve watched buyers save tens of thousands over the life of the loan by following that sequence. New construction gives you rare leverage with builder credits—use them with a plan, and your payment and long-term costs will thank you.