11/04/2026
Keep hearing me say the term “2/1 RATE BUY DOWN” but don’t know what that means?! 🤔🏡 Big savings is what it means!
Let’s break it down! ⬇️
A 2/1 buydown helps lower your monthly mortgage payments for the first TWO years. The seller can contribute money at closing to cover the difference between your reduced payments and the full payment.
Here’s how it works:
🏡 Year 1: Your payment is calculated using a rate 2 percentage points below your loan’s rate.
🏡 Year 2: Your payment is calculated using a rate 1 percentage point below your loan’s rate.
🏡 Year 3 onward: You pay the full payment based on your loan’s rate.
For example, on a $300,000 loan amount with a 30 year term and a 7.30% rate:
👉 Year 1 (5.30%): About $1,666/month
👉 Year 2 (6.30%): About $1,857/month
👉 Year 3 onward (7.30%): About $2,057/month
That’s approximately $391 LESS per month during your first year! 🙌
In this example, a seller contribution of about $7,087 would fund those two years of payment savings.
The buydown money covers part of your payment temporarily, but you still have to qualify for the full payment from the start. You can also refinance at anytime if rates go down and you don’t lose the money the seller contributed. Any remaining amount gets applied to your principal balance at the time of refi!
Buying? This could give you some breathing room as you settle into your new home. Selling? It could be an incentive to help your home stand out!
📲Let’s talk about what this could look like for you!
Amanda Lass, REALTOR®
Cell: 985-249-1732
Keller Williams Realty Premier Partners
Office: 225-664-1911
Example only. Payments shown include principal and interest only. Taxes, insurance, mortgage insurance and HOA fees are additional. Rates, eligibility and seller contribution limits vary. Lender to confirm figures.
Each office independently owned and operated.
