Loan programs · 2-1 Buydown
2-1 Buydown
A temporary rate buydown that lowers your interest rate, and your monthly payment, for the first two years of your mortgage.
Takes about 2 minutes. A quick inquiry, not a loan application.
Who it's for
Often a fit for buyers, sellers and builders.
It’s a negotiation tool, not a discount from the lender.
Buyers
Lower payments in the first two years can ease the transition into a new home, especially if you expect your income to grow or plan to refinance later.
Sellers and builders
A buydown can make a listing stand out and move inventory without cutting the asking price.
Buyers negotiating an offer
Instead of asking for a price reduction, a buyer can ask the seller to fund a 2-1 buydown.
The details
How a 2-1 buydown works
With a 2-1 buydown, your interest rate is reduced by 2% in the first year and 1% in the second year, compared to your full note rate. Starting in year three, the rate adjusts to the full note rate for the rest of the loan term.
A simple example: if your note rate is 7%, you’d pay at 5% in year one, 6% in year two, and 7% from year three on. This is an illustration only, not a rate quote or offer.
The buydown is usually funded by seller concessions or builder incentives: money put up at closing to buy down the rate for those first two years.
Want the background? Read What is a temporary buydown?
Matthew Hassey NMLS #118199 · Company NMLS #1960829 · Licensed in NC, SC, FL, GA, VA.
Why buyers consider a 2-1 buydown
- Lower payments in years one and two
- Can be funded by seller concessions or builder incentives
- An alternative to asking for a price reduction
- We run the numbers with you so there are no surprises
How it works
One conversation. Many lenders. Your choice.
As a broker, we don’t have one loan to sell you. We compare programs across lenders and walk you through the trade-offs in plain language.
Tell us your goal
A short inquiry: what you want to do, and how to reach you.
We review your options
A licensed loan officer looks at programs across our lender network.
You choose
Compare the trade-offs side by side. No pressure to move forward.
We guide you to closing
Application, processing and underwriting, with one team keeping you updated.
What happens in year three?
A 2-1 buydown is temporary. In year three, your rate, and your payment, goes back to the full note rate for the rest of the loan term.
Do I qualify at the reduced rate?
No. You still have to qualify for the loan at the full rate, not the reduced one.
Who pays for the buydown?
It is usually funded by seller concessions or builder incentives, money put up at closing to buy down the rate for the first two years.
Is a buydown a discount from the lender?
No. It’s a negotiation tool: instead of asking for a price reduction, a buyer can ask the seller to fund a 2-1 buydown.
How much do I need for a down payment?
It depends on the program, the property and your situation. We’ll walk you through what each option requires.
Compare programs
Explore other loan programs
Program availability, eligibility and guidelines vary by lender and may change without notice. All loans are subject to credit approval, underwriting guidelines and property eligibility. This is not a commitment to lend.
See what's possible for your next move.
Two minutes to tell us your goal. A licensed loan officer follows up personally.