How a 2/1 Buydown Works
With a 2/1 buydown, funds paid at closing reduce the buyer's effective interest rate for the first two years of the mortgage. The payment is calculated at two percentage points below the note rate in year one, one percentage point below in year two, and then at the full note rate beginning in year three.
Start with the lowest scheduled payment.
Step gradually toward the full payment.
Continue at the original loan terms.
Why Buyers Consider It
Is It Right for You?
A 2/1 buydown is not a permanent rate reduction, and eligibility, funding, and loan guidelines vary. The best next step is to review the purchase price, financing, projected payments, and available concessions with qualified real-estate and lending professionals.
This information is for general educational purposes only and is not a commitment to lend or a guarantee of eligibility. Program terms and availability may change.