How a '2-1 Buydown' works

The 2-1 buydown mortgage option has been getting a lot of attention in the news lately, but what exactly is it?

A 2-1 buydown is a mortgage loan option in which the seller or builder reduces the homebuyer’s interest rate for the first two years of the loan. In year one, the interest rate is 2 percent less than the original, locked-in rate. In year two, the interest rate is 1 percent less.

The seller or builder covers the difference between what your payment typically would be and the adjusted, bought-down rate.

Homebuyers benefit as they’re able to ease into their mortgage over time. It can be nice to offset extra expenses with a graduated payment. 

But homebuyers aren’t the only ones who can benefit from a buy down. Offering a temporary buydown can give potential buyers an extra incentive to purchase your home without you having to decrease the price.

"The 2024 presidential election will most likely create an opportunity to take advantage of dating your rate," Aksarben Mortgage Partner and Lead Advisor John Major said.

For more information, contact the team at Aksarben Mortgage!


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.