Published January 2, 2026
What is a Mortgage Buy Down (In Plain English)?
What Is a Mortgage Buy-down (In Plain English)? This is one way to make getting into a new home more affordable.
Instead of locking into one payment right away, a buy-down gives you a temporary discount on your interest rate, which means lower payments at the beginning when budgets often feel tighter.
How a 2-1 Buy-down WorksUsing a real example from a current listing.
• Loan amount: $400,000
• Normal rate: 6.25%
Year 1
Your rate is reduced to 4.25%
Monthly payment: $1,967
Savings: about $495 per month
Year 2
Your rate increases to 5.25%
Monthly payment: $2,208
Still lower than the full payment
Year 3 and beyond
Your rate settles at 6.25%
Monthly payment: $2,462
Who Pays for the Buy-down?The cost of the buy-down (about $8,990 in this example) is usually paid by:
• the seller
• the builder
• or negotiated as part of the purchase
That money is set aside up front and used to subsidize your payment in years one and two.
Why Buyers Like Buy-downs• Easier payments early on
• Time to adjust to homeownership
• Helpful if rates drop and you refinance later
• Can make a home more affordable now
One Important NoteBuy-downs are temporary, not permanent.
Your payment will increase over time, so it’s important to plan for that.
If you’re curious whether this could work for you or your buyer, I’m happy to walk through it with real numbers. Click on this link: https://www.debrarhea.com/buying
