Does a HELOC replace my mortgage?

No — that's the main difference from a cash-out refinance. A HELOC sits behind your existing mortgage as a second lien, so your original loan stays exactly as it is.

Can I borrow again after paying down a HELOC?

Yes, during the draw period — that revolving flexibility is the defining feature. After the draw period ends, the line enters repayment and you pay the balance down.

HELOC or cash-out refinance — which is better?

It depends on your current mortgage, how much you need, and whether the need is ongoing. If you want to keep your mortgage and value flexibility, a HELOC often fits; for a single lump sum, a cash-out refinance may be better.

What Is a 2-1 Buydown? | MortgageQuote.com

What a temporary buydown is

A temporary buydown is an arrangement that reduces your mortgage payment for the first years of the loan, then steps up to the full payment. A "2-1 buydown" is a common version: it reduces the effective rate more in year one and less in year two, before settling at the note rate from year three onward. The idea is to ease you into the payment, which can be helpful if you expect your finances to strengthen or simply want lower initial costs. It is temporary by design.

How the 2-1 structure works

In a 2-1 buydown, the payment is calculated as if your rate were lower in the early years — the largest reduction in the first year, a smaller reduction in the second — and then you pay based on your actual note rate for the remaining term. The difference is covered upfront through a buydown arrangement, so during those first two years your out-of-pocket payment is genuinely lower. After the buydown period ends, your payment is the full amount based on your loan’s actual rate.

Who pays for it, and why

A key feature of temporary buydowns is that they are often funded by someone other than the buyer — frequently a seller or builder using it as an incentive to help close a sale. This is common in markets where sellers want to make their home more attractive. Because the buydown is paid upfront, understanding who is covering it and how it is structured matters. When a seller or builder funds it, a 2-1 buydown can be a genuine benefit to the buyer at no direct cost to them.

Deciding if a buydown fits

A temporary buydown can be a smart tool in the right situation, especially when a seller or builder is offering to fund it. As a Florida mortgage broker (NMLS #1967971), MortgageQuote.com can explain how a 2-1 or other temporary buydown would work on your loan, who would pay for it, and whether it makes sense versus other options — so you understand exactly what you are getting. See also our guide on points.

This article is for general educational purposes and is not financial, legal, or tax advice, nor a commitment to lend or an offer of any specific rate or term. Consult a licensed professional about your situation. MortgageQuote.com · NMLS #1967971. Equal Housing Opportunity.

Frequently asked questions

What is a 2-1 buydown?

A temporary buydown that lowers your payment more in year one and less in year two, then settles at your full note-rate payment from year three on. It eases you into the payment over the first two years.

How does a 2-1 buydown work?

Your payment is calculated as if your rate were lower in the first two years (biggest reduction year one), with the difference covered upfront. After the buydown period, you pay the full amount based on your actual loan rate.

Who pays for a 2-1 buydown?

Often someone other than the buyer — frequently a seller or builder using it as an incentive to help close a sale. When they fund it, the buyer gets lower early payments at no direct cost.

Is a temporary buydown different from buying points?

Yes. A temporary buydown lowers your payment for a set early period then returns to the full rate. Buying points (a permanent buydown) reduces your rate for the life of the loan. They serve different goals.

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