James and Amy have decided to buy a new home that costs $240,000. They want to make a 20% down payment and finance the rest over 30 years. Their bank has offered an opportunity to buy down the quoted interest rate of 3.75% by 0.125% per point purchased. Each point will cost 1% of the amount borrowed. James and Amy were hoping the interest rate was no more than 3.375%. If the monthly payment at 3.75% is $889.18, and the monthly payment at 3.375% is $848.82. How long will it take for the cost of the points to be recovered by the savings in the monthly mortgage payment?
