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🧐 Buying a Home? A 2-1 Buydown Could Save You Thousands

Home Buyers

What Is a 2-1 Buydown — and How Can It Help You?

If you’ve been keeping an eye on mortgage rates lately, you’ve probably noticed they’re higher than they were a few years ago. That can be frustrating for buyers — and even a little scary. But there’s a financing tool that might just make buying a home more affordable in the early years of your mortgage: the 2-1 buydown.

So, What Is a 2-1 Buydown?

A 2-1 buydown is a mortgage option that allows you to temporarily lower your interest rate for the first two years of your loan.

Here’s how it works:

  • Year 1: Your interest rate is reduced by 2 percentage points.

  • Year 2: Your interest rate is reduced by 1 percentage point.

  • Year 3 and beyond: You pay the full interest rate you locked in when you closed.

Example of a 2-1 Buydown

Let’s say you qualify for a mortgage at a 7% fixed interest rate:

  • In Year 1, you’ll only pay 5% interest.

  • In Year 2, you’ll pay 6% interest.

  • Starting in Year 3, you’ll pay the full 7% interest for the remainder of the loan.

This can lead to significant savings in the first two years — often thousands of dollars — which can help with moving expenses, furnishing your new home, or just easing the transition into homeownership.


Who Pays for the Buydown?

Typically, the seller, builder, or lender pays the cost of the buydown as a concession or incentive to help make the sale more attractive. The cost is paid upfront and goes into an escrow account that is used to subsidize your monthly payments during the buydown period.

In today’s market, where sellers may be more motivated, many are willing to offer a 2-1 buydown to attract serious buyers.


Why Buyers Love It

  • Lower Payments at the Start – You ease into your mortgage with more affordable monthly payments.

  • More Time to Adjust – Gives you a financial buffer if you’re expecting your income to increase in the near future.

  • Potential Refinance Opportunity – If rates come down in the next few years, you might refinance before ever paying the full rate.


Why Sellers and Builders Offer It

In a market where buyers are more rate-sensitive, offering a 2-1 buydown can:

  • Help your home stand out from the competition

  • Attract more qualified buyers

  • Make your home more affordable without dropping the price


Is a 2-1 Buydown Right for You?

A 2-1 buydown can be a great option — especially if you:

  • Want lower payments up front

  • Expect your income to grow

  • Plan to refinance in the next few years

It’s not the right fit for every situation, but it’s one of several strategies we can explore together to make your next move more affordable and strategic.


If you’re thinking about buying or selling a home and want to learn more about using a 2-1 buydown to your advantage, let’s connect! I’d be happy to walk you through the numbers and explore what’s possible.

📞 (817) 692-6152

📧 [email protected]

🏡 Sandefur Realty Group – Serving the DFW Metroplex

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Sandefur Realty Group brings expertise in negotiations, new home construction, marketing your home for sale as well as finding the home of your dreams. Hundreds of satisfied clients have referred friends and family as well as come back time and again for their customer service and ability to get the job done.