I recommend checking out ClarkHoward.com for an easy wealth of information on this topic--or even call in to the show any weekday between 1 & 4pm EST.

Also, for a quick calculator and explanation you can try the link below.

Here is a link that might be useful: Buying Down A Mortgage

Buying down comes down to how long you plan on paying on the mortgage.

If you sell or refinance before you recover the points you paid more than you otherwise would have.

A complete analysis needs to include the effects of inflation in a long term calculation, and at that point the calculations start getting more complicated with greater uncertainty (you have to estimate what inflation is going to do at periods farther and farther into the future).

Usually the uncertainty makes the longer term estimates very unstable.
A small variation in the inflation estimate can completely change the results, making them more uncertain.

One of the key things for calculations like this is to assess how far off things like inflation estimates have to be before the answer changes (AKA 'sensitivity analysis').