Details of the 2/1 Buydown

It’s important to understand this is NOT an adjustable rate mortgage. An adjustable rate mortgage has an initial fixed period, then adjust based on where the market is at that time. A 2/1 Buydown, the rate is fixed for the life of your loan, it starts out 2% lower for the first year, then 1% lower for the second year. The third year and beyond it goes to your normal rate locked in before closing and stays that way as long as you have the loan

If rates drop in the future, you can always refinance out of the loan into a new one. If they continue to go up, your rate is locked in so it will not be impacted.

The 2/1 Buydown Mortgage Loan Process

• The 2/1 buydown must be paid by the seller
• Year 1 your rate will be lower by 2%
• Year 2 your rate will be lower by 1%

To combat the recent changes in market interest rates, the 2/1 buydown was released to give buyers some breathing room until the market settles. This option is available on conventional purchase mortgage loans, and allows a buyer to get a fixed rate loan, that starts out 2% lower for the first year, and 1% lower for the second year. If the market drops in the mean-time, you can always refinance and there are no prepayment penalties.