What Is a Mortgage Rate Buydown?

A rate buydown is a way to lower your mortgage interest rate, either temporarily or permanently, by paying an upfront cost. It can reduce your monthly payment, especially in a higher-rate environment.

Permanent Buydowns (Discount Points)

You can pay discount points at closing to permanently lower your interest rate for the life of the loan. Each point typically costs 1 percent of the loan amount.

Temporary Buydowns

A temporary buydown lowers your rate for the first year or two, then steps up to the full rate. These are often paid for by the seller or builder as an incentive.

Who Pays for a Buydown?

Buydowns can be funded by you, or negotiated as a seller or builder concession, which is a strategy your agent can help you pursue.

Could a Buydown Help You?

As your REALTOR, I can help you negotiate seller-paid buydowns and connect you with lenders to see if one fits. Reach out and we'll run the numbers.