Purchase
2-1 Buydown Mortgage
Lower your payment for the first two years—great if income is rising or you want breathing room early on.
Why a 2-1 Buydown?
- Year 1 rate ~2% lower; Year 2 ~1% lower than note rate
- Seller/lender credits can fund the buydown
- Helps with early affordability while settling in
- Works on many fixed-rate programs (guidelines apply)
Eligibility at a glance
- Primary residence (most common); some programs vary
- Credit, DTI and LTV per program/investor guidelines
- Buydown funds typically held in escrow
- Seller credit limits still apply
Rate, APR & Payment (example)
Sample: $400,000, 30-yr fixed with 2-1 buydown. APR reflects certain costs of credit; note rate calculates P&I. First-two-year payments use the temporary reduced rates. Taxes/insurance/MI not included. Illustrative only.
FAQs
What happens after Year 2?
Payment steps up to the full note rate from Year 3 onward.
Who can fund the buydown?
Often seller or lender credits; program rules apply.
Is this the same as paying points?
Points permanently lower the note rate; a buydown is temporary.
Disclosures:
Availability varies by program and investor. Underwriting approval required. Not a commitment to lend.