Pay points or not?

Obviously, don't buy if you don't know if you're staying more than 2 yrs. If you're already in and choosing between the two and are unclear how long you're staying, option 2.

option 1 will take almost 9 yrs to get the money back by my calculations. not a good option.

with points per month 2086.76
with points per month 2123.54
savings per yr 441.36

The % of points you want to pay are determined by how many years you plan on holding on the property to recuperate the initial cost. If you plan on staying less than X years that you would take to recup the costs, then it's simply not worth it. There is a simple formula anyone can figure out themselves. It's the sum of the difference in interest rates.

We should count the interest component only from the amortized schedule, no? To figure the breakeven costs?