When you lock a mortgage, the lender hands you a menu. You can pay points to push the rate below par, or accept a rate above par and take a lender credit that covers some or all of your closing costs. The credit is cash in your pocket on closing day. The cost is a higher monthly payment that follows you for as long as you keep the loan.
Which side wins comes down to time. If you expect to refinance or sell before long, the up-front credit usually beats the small monthly difference. Hold the loan long enough and the higher payment quietly erases the credit, then keeps costing you. The month those two forces cancel out is the break-even, and it is the one number that decides the call.
The calculator above plots the net dollars for each higher-rate-plus-credit option against your par loan, across every month you might refinance. Enter your loan amount, the par rate, and the rate-and-credit options your lender quoted, then drag the slider to your expected refinance date and read the verdict.