In mortgages, why are they called ‘points’?
Specifically, I am questioning the use of the word ‘points’. I know what they are and how they work, so this question is about semantics. So why the word points? Why not just say percent, fee or prepaid interest? Example: “John, did you pay points on your new mortage?” could be said as “John, did you prepay interest on your new mortage?” or “John, what percent did you pay for your up-fronts on your new mortgage?” or “What percent was your loan origination fee?” I find this interesting because even though points is just a word in the complete phrase “percentage points” there isn’t any other lexicon that fixates on the word ‘points’ as it pertains to a percentage rate. Although I do frequently hear business media replace the noun ‘dollar’ with ‘point’, as in: “Dow Chemical was up two points today in trading.”