why our team loves 2-1 buydowns
They’re a smart tool in today’s market. 2-1 buydowns ease buyers into their mortgage, make monthly payments lower early on, and are often covered by the seller or builder, so buyers get a break without added cost. They also offer peace of mind with a fixed-rate structure and clear timeline for payment increases.
2-1 Buydowns At A Glance
A 2-1 buydown temporarily lowers your interest rate for the first two years of your mortgage, giving you lower monthly payments upfront. It’s a great tool for easing into your mortgage and improving affordability, especially when paired with seller concessions.
How it works
- Year 1: Rate reduced by 2%.
- Year 2: Rate reduced by 1%.
- Year 3+: Full note rate for the remainder of the loan.
- Funded By: Typically covered by seller, builder, or lender—not added to the loan balance.
2-1 Buydown Guidelines
- Qualification: Must qualify based on the full note rate
- Program Duration: 2 years of temporary rate reduction
- Who Pays: Typically funded by the seller, builder, or lender
- Property Eligibility: Primary residences and some second homes
2-1 Buydown Pros
- Lower Payments Now: Reduces your monthly costs during your first two years.
- Breathing Room: Helps you adjust to mortgage costs, especially with other big expenses.
- Seller Concession Friendly: Often used as a smart negotiation tool in today’s market.
- Predictable Payment Timeline: Know exactly when and how your payment will change.
- Great For Career Growth: Ideal for buyers expecting future income increases.
Best for…
First-time buyers
Buyers who expect their household income to go up in the next few years
Those negotiating seller concessions
Households with big upfront expenses (moving, furnishing, etc.)
Buyers who want lower payments without committing to an ARM
Free Guides & Resources
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