Temporary Mortgage Buydown
Lower your initial mortgage payments and ease into homeownership
What is a Temporary Buydown?
A temporary mortgage buydown is a financing technique where you pay extra points upfront to reduce your interest rate for the initial years of your mortgage. This creates lower monthly payments during the early years of homeownership when many buyers need it most.
Lower Initial Payments
Reduce your monthly payments in the early years
Seller Contributions
Sellers can pay for the buydown to help close the deal
Future Protection
Known payment schedule with fixed-rate security
Popular Buydown Options
2-1 Buydown
3-2-1 Buydown
1-0, 3-2-1 & 2-1 Buydown Calculator
Use our free interest rate buydown calculator to model 1-0, 2-1, and 3-2-1 temporary buydown programs. Compare year-one payments, estimate the buydown subsidy, and explore 15-, 20-, and 30-year loan terms.
Open Buydown CalculatorUnderstanding Mortgage Buydowns
A temporary mortgage buydown reduces your interest rate for the first one to three years of your loan, then returns to the note rate. The 1-0 buydown — our most popular option — lowers your rate by 1% in year one. Multi-year programs like 2-1 and 3-2-1 offer deeper early savings on 15-, 20-, or 30-year loan terms.
Types of Buydowns
1-0 Buydown
Interest rate is reduced by 1% in year 1, then returns to the note rate.
2-1 Buydown
Interest rate is reduced by 2% in year 1 and 1% in year 2, then returns to the note rate.
3-2-1 Buydown
Rate reduces by 3% first year, 2% second year, and 1% third year.
Benefits & Considerations
Benefits
- Lower initial monthly payments
- Easier qualification for homebuyers
- Time to adjust to homeownership costs
- Potential for future rate decreases
- Can be paid by seller or builder
Considerations
- Upfront cost of buying down the rate
- Payment increases after buydown period
- May not be best if planning to move soon
- Consider future income expectations
Common Questions
Who pays for the buydown?
The buydown can be paid by the seller, builder, buyer, or any combination. It's often used as a seller concession to help close the deal.
What happens after the buydown period?
Your interest rate and monthly payment will increase to the full note rate according to the buydown schedule. This is a temporary reduction only.
Can I refinance during the buydown period?
Yes, you can refinance during the buydown period, but you'll lose any remaining benefits of the reduced payment schedule.
Are buydowns available on all loan types?
Buydowns are typically available on conventional, FHA, and VA loans, but specific terms and availability may vary by lender and program.
Ready to Learn More?
Our mortgage experts can help you understand if a temporary buydown is right for your situation.
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(855) 699-1424