2-1 Mortgage Buydown 2025: Save $800/Month Year One 💰
The viral TikTok mortgage hack! Get seller to pay for 2-1 buydown: drop rate 2% year 1, 1% year 2. Save $16K in 2 years. Complete guide with negotiation scripts and state availability.
💰 Real Savings ($350K Loan at 6.2%)
Sarah Mitchell
Senior Mortgage Advisor & VA Loan Specialist
Sarah Mitchell brings over 12 years of mortgage industry expertise, specializing in VA loans and first-time homebuyer programs. As a certified NMLS professional, she has helped thousands of veterans and military families achieve homeownership through specialized loan programs. Her deep understanding of VA benefits and down payment assistance programs makes her a trusted advisor for service members transitioning to civilian life.
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🎯 What Is a 2-1 Buydown?
A 2-1 buydown temporarily reduces your rate: 2% lower year 1, 1% lower year 2, then returns to original rate years 3-30.
Best part? Seller typically pays via closing credits!
Massive Year 1 Savings
Save $800+/month year one. Use for emergency fund, debt payoff, or home improvements.
Seller Pays
Sellers offer 3-6% credits to close deals. Use credits to fund buydown!
Refinance Option
If rates drop 2026-2027, refinance before year 3. If not, you saved $16K+.
Qualify for More
Lenders qualify on year-1 payment. Lower payment = bigger loan approval.
Compare 5 lenders • See if you qualify
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⚙️ How 2-1 Buydown Works (Year-by-Year)
📊 Example: $350K Loan at 6.2%
YEAR 1
4.2%Rate: 6.2% - 2% = 4.2%
Monthly Payment: $1,713
Savings vs Full Rate: $800/month
YEAR 2
5.2%Rate: 6.2% - 1% = 5.2%
Monthly Payment: $1,980
Savings vs Full Rate: $533/month
YEAR 3-30
6.2%Rate: 6.2% (full note rate)
Monthly Payment: $2,513
Total 2-Year Savings: $16,000
💡 Who Pays for the Buydown?
Buydown costs ~$8K-$10K for $350K loan. Paid upfront at closing, held in escrow.
In 2025, sellers typically pay via 3-6% closing credits. You get savings, seller pays!
💰 Real Savings Examples (Multiple Loan Amounts)
2-1 buydown savings at different loan amounts (6.2% base rate):
| Loan Amount | Year 1 Payment | Year 2 Payment | Year 3+ Payment | Total 2-Yr Savings |
|---|---|---|---|---|
| $200,000 | $979 | $1,131 | $1,436 | $9,144 |
| $250,000 | $1,224 | $1,414 | $1,795 | $11,430 |
| $300,000 | $1,469 | $1,697 | $2,154 | $13,716 |
| $350,000 | $1,713 | $1,980 | $2,513 | $16,002 |
| $400,000 | $1,958 | $2,263 | $2,872 | $18,288 |
| $500,000 | $2,448 | $2,828 | $3,590 | $22,860 |
🎯 Smart Strategy: Use Year 1-2 Savings To...
- ✓Build 6-month emergency fund
- ✓Pay off high-interest debt
- ✓Make home improvements
- ✓Save for refinance costs (if rates drop)
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⚖️ 2-1 Buydown vs Permanent Buydown
2-1 TEMPORARY
BEST FOR:
Buyers planning to refinance in 2-3 years OR need lower payments now
PERMANENT (Points)
BEST FOR:
Buyers staying 10+ years AND rates unlikely to drop
🎯 2025 Recommendation: Go with 2-1
Rates (6.2%) likely to drop 2026-2027. 2-1 buydown gives you:
- ▸Immediate relief with lower payments
- ▸Flexibility to refinance if rates drop
- ▸Lower cost sellers will pay
🤝 Get Seller to Pay (Negotiation Scripts)
🔥 Sellers WANT to Offer Credits in 2025
Homes sit 12+ days longer, 18% more inventory. Sellers motivated. Buydown helps:
- ✓Close faster
- ✓Attract more buyers
- ✓Avoid price drop
Script 1: Initial Offer
"Offering [price] with 3% seller credit for closing costs and 2-1 buydown."
"Buydown helps us qualify at lower payment and close quickly."
"Pre-approved, ready to close in 30 days."
Script 2: Counter-Offer
"Benefits you: 1. Close faster 2. Avoid price reduction 3. Standard incentive in today's market"
"Meet at 2.5% credit?"
🏗️ Builder Buydown Incentives (New Construction)
Builders Offer BEST Buydown Deals
New construction builders in 2025 are offering full 2-1 buydowns at NO COST to move inventory:
💡 Builder Buydown Strategy
- 1. Tour multiple builders - Compare buydown offers
- 2. Negotiate stacking - Buydown + closing costs + upgrades
- 3. Use preferred lender - Required for builder incentives
- 4. Time it right - End of quarter = best deals
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