You can pay for mortgage points in order to lower your mortgage interest rate. This is often referred to as "paying points to buy down your rate."
Depending on your mortgage type, each point you buy will cost around 1% of your loan amount. For example, if your loan is $250,000, paying 1 point would cost you $2,500. In return, your interest rate will be lowered by less than 1% — typically between .125% and .375%.
Paying points is optional. If you choose to buy points, they will increase the amount you need to pay at closing. Loans without points typically have higher interest rates and lower closing costs.