Rate Buydown
Also known as Buydown
Paying extra upfront to temporarily or permanently lower your mortgage interest rate.
In plain English
A buydown reduces your interest rate — either for the full loan term (a permanent buydown, usually via discount points) or just the first year or two (a temporary buydown), in exchange for an upfront cost paid by you, the seller, or the builder.
Temporary buydowns can ease your payment during the first year or two of ownership, but it's worth confirming you can afford the full payment once the buydown period ends.
Where you'll run into it
Guides and tools on TheBuyingPath that cover rate buydown in context.
Related terms
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