You are accurate in that a lender will charge a higher rate for a no point/no fee loan - this is indeed how they cover your costs.
What is important here is how much costs they are covering vs the savings or "cost" of the loan in rate.
Let's look a little closer to see what I mean:
A typical refinance will run about $3k in closing costs all things considered. So, on a $300k loan the lender will need to not only cover there costs, but pay themselves as well. In your case, at a 4.5% interest rate, that payment would equate to $1520 per month.
A loan at today's rate of say 3.625% with no points -- but you pay that $3000 in closing costs, would have a payment of $1368.
So the savings if you just go no point is about $150 per month. That means if you paid your closing costs (whether they were included in the loan or you paid cash), it would take you aobut 20 months to recoup that cost - which is extremely good and in which case you should be advised to go pay the fees and go with the lower rate - if you are staying in the home for longer than 20 months.
For most of my clients that are refinancing - especially now with rates this low, I am happy with a payback of 36-60 months if they are keeping the home long term. Most people, even with the best of intentions, do something with a loan on their home (sale, refinance, etc.) every 5-6 years.
I hope that this covers everything, but should you have further questions, please don't hesitate to ask.
One exercise you should consider doing is a breakeven analysis between your financing options (to pay or not pay points for a lower rate). To calculate "breakeven dateâ€:
1) Calculate the monthly payment WITHOUT paying down your rate,
2) Calculate the monthly payment WITH paying down your rate,
3) Take result from #1 and minus result from #2 (this is your savings per month by paying down your rate).
4) Now, take the total cost of paying down your rate and divide by the result from #3 (this is your breakeven point in months-time).
Now you can consider the cost vs. benefit based on the number of months/years you intend to own the home. For every month you stay past the breakeven point you are saving money. Leave before the breakeven point, and you have lost money by paying down your rate.
Some rates may be lower -- but the loan origination points are charged up front
Some rates may be higher -- but the loan origination points are not applicable
Either way, it's a matter of you either pay now or later....
Get the GFE (Good Faith Estimate) to see what fees if any are charged. Don't make the assumption that there won't be any costs --- get it in writing.
Best of luck. Remember that if a deal sounds too good to be true, there's something they are not telling you.
You assumption is correct. Here are a few links you might find interesting:
"Retail Banks vs. Mortgage Broker/Bankers"
Personally, I only work with Mortgage Broker/Bankers.