Increasing Interest Rate to get a closing credit

[Derek Luttrell]

Hey Everyone, 

I am closing on my first purchase in about a week. I am house-hacking a 3-bedroom condo in Chicago by having 2 roommates each pay me $900/month+ utilities while I'm in the master. 

This might be a no-brainer, but yesterday my lender told me that if I increase the interest rate from 4.125% to 4.250%, they will give me a $1,290 closing credit, and this will increase the monthly payment by about $20/month. Is this worth it,or is this a sales tactic by the lender that's really just a bigger benefit for them? 

I'm buying the condo for $355,000, with a $5,000 closing credit from the seller, and a 2% ($7,100) closing credit from the lender since I am a first time buyer (25 yrs old) and have an 800+ credit score. This $1,290 will be on top of the $7,100 the lender is already giving me.

My plan is to live here for probably two years, and hold the property as a rental. Thank you!