Your loan
A temporary buydown reduces the rate for the first year(s) only; the note rate applies afterward. You supply the note rate; no MortgageQuote.com rate is quoted or implied. Estimates for education only.
Buydown summary
How a temporary buydown works
A temporary buydown reduces your interest rate for the first year or two of the loan, then steps back up to the full note rate for the remaining term. In a common 2-1 buydown, your rate is 2 percentage points lower in year one and 1 point lower in year two, before settling at the note rate in year three and beyond. The cost of those reduced payments is funded up front, often by a seller or builder as a concession, and held in an account that supplements your payment during the buydown period.
What to weigh
A buydown can ease the first year or two of ownership, which some buyers value while they settle in or anticipate income growth. But the note rate is what you pay long-term, so it is important to be comfortable with the full payment after the buydown ends. Because buydowns are frequently paid by a seller or builder, they often come up in negotiations rather than as an out-of-pocket buyer cost.
Estimates only
This tool estimates payments and total buydown cost from the note rate you enter. Your actual terms, and whether a buydown is available or paid by another party, depend on your transaction. A licensed loan originator can explain the specifics.
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