When discount points are paid, the bank collects a one-time fee at closing in exchange a lower mortgage rate to be honored for the life of the loan.
The banks consider this payment to be "prepaid mortgage interest". Meanwhile, mortgage interest is tax-deductible for eligible tax-filers so, for many mortgage borrowers, there's a tax advantage to paying discount points.
You need to find a number that all three of those numbers go into. They all go into 60. Then, divide 60 by three because there are three items. 60 divided by 3 is 20, which is the answer.
