You are considering purchasing an existing single family house for $200,000 with a 20 percent down payment and a thirty-year fixed-rate mortgage at 5.5 percent.
Your question is not clear… How much would you save as compared to what? Are you saying that your mortgage is being offered at 7.5% and you can buy that down to 5.5%? Or are you saying you can buy it down from 5.5 to 5%? At what cost… What are the points being calculated against? Are you also avoiding PMI?
In the most simple terms, you are paying $3200 in points in exchange for $800 less interest per year (although this savings will drop each year as the principle balance of your mortgage drops).
I am assuming 5.50% vs. 5.00% on $160,000 ($200,000 less 20% down), no PMI insurance.
So in very rough terms, your break-even will be around 4-5 years. After that, you are saving money.