Points represent a one-time fee paid to the lender. The more points you pay at closing, the lower interest rate available. Points are the price that you, the borrower, pay for obtaining a certain interest rate. No two taxpayers may find themselves in the same situation with the same right answer. Sometimes, it pays to pay more at the outset to gain more over the long term.
Lets use an example with real numbers to illustrate the point.
The answer is - it depends. You and your tax professional are in the best position to come up with the correct answer for your situation. 110 equals nine years and two months. If you don't plan on living there that long it might make more sense to pay a higher rate and pay fewer points up front. Your tax professional can not only guide you through this important decisions - they can save you money as well.