One point on a $500K loan = $5,000 paid at close, typically lowering the rate by 0.25% (varies by lender and market). Whether points "pay off" depends on how long you hold the loan before selling or refinancing.
Break-even calculation: (points cost) / (monthly savings from lower rate) = months to break even. If break-even is 36 months and you plan to sell in year 4+, paying points makes sense. Plan to sell in year 2? Skip the points.
Points are tax-deductible in most cases for primary residence purchases. Check with a CPA for your specific situation.