How a 2-1 Buydown Works Right Now

A 2-1 interest rate buydown can make the first years of homeownership easier by temporarily reducing the buyer’s mortgage rate. The rate is typically 2 percentage points lower in year one, 1 point lower in year two, and returns to the permanent note rate in year three. The seller, builder, or another party may fund the subsidy, but buyers must still qualify using the permanent rate and understand the future payment increases. In Kingwood, Texas, compare the buydown with price reductions, closing-cost credits, and other financing options. Your lender can provide exact figures, while your real estate agent can help evaluate the overall offer.