Mortgage Rate Buydown 2026: Seller Concessions Save $300-600/Month
David Thompson
Mortgage Rate Specialist | 18+ Years Experience
Published: January 21, 2026 | Updated: January 21, 2026
💰 2026 TRENDING: Sellers & Builders Buying Down Rates!
With rates at 6.5-7%, sellers are offering rate buydowns to attract buyers. Save $300-600/month for 1-2 years with 2-1 or 1-0 buydowns. Builders especially aggressive - some offering rates as low as 4-5%!
What Is a Mortgage Rate Buydown?
A mortgage rate buydown is when someone (seller, builder, or you) pays upfront cash to temporarily or permanently reduce your mortgage interest rate. This lowers your monthly payment, making homeownership more affordable.
💡 Simple Example: 2-1 Buydown
Market Rate: 7% on $400K loan = $2,661/month
✅ Year 1: 5% rate = $2,147/month (save $514/month = $6,168/year)
✅ Year 2: 6% rate = $2,398/month (save $263/month = $3,156/year)
✅ Year 3+: 7% rate = $2,661/month (normal payment)
Total 2-year savings: $9,324 | Typical cost: $6,000-8,000 (seller pays!)
🎯 Find Homes with Seller-Paid Buydowns
Types of Mortgage Rate Buydowns
1. 2-1 Buydown (Most Popular)
Rate is 2% lower in year 1, 1% lower in year 2, then returns to market rate in year 3+.
Example on $400K loan at 7%:
- • Year 1: 5% = $2,147/mo (save $514/mo)
- • Year 2: 6% = $2,398/mo (save $263/mo)
- • Year 3+: 7% = $2,661/mo (market rate)
Cost: $6,000-10,000 (typically 1.5-2.5% of loan amount)
Best For: Buyers expecting income increase, sellers in slow markets
2. 1-0 Buydown (Budget-Friendly)
Rate is 1% lower in year 1, then returns to market rate in year 2+.
Example on $400K loan at 7%:
- • Year 1: 6% = $2,398/mo (save $263/mo)
- • Year 2+: 7% = $2,661/mo (market rate)
Cost: $3,000-5,000 (typically 0.75-1.25% of loan amount)
Best For: Tight budgets, conservative sellers, first-year cash flow relief
3. Permanent Buydown (Discount Points)
Pay upfront to permanently reduce your rate for the entire loan term (30 years).
Example on $400K loan:
- • 1 point ($4,000) = 0.25% rate reduction
- • 7% → 6.75% = save $67/mo = $24,120 over 30 years
Cost: 1% of loan = 0.25% rate reduction (typical)
Best For: Long-term homeowners, low rates worth locking in
Calculate Permanent Buydown ROI →Rate Buydown Calculator 2026
Calculate Your Buydown Savings
Who Pays for the Buydown?
🏠 Seller-Paid
Seller pays buydown cost as concession to attract buyers in slow markets.
Most common in 2026!
Find Seller Concessions →🏗️ Builder-Paid
New home builders offer aggressive buydowns (4-5% rates!) to move inventory.
Best deals in 2026!
Explore New Builds →💰 Buyer-Paid
You pay buydown cost yourself to lower payments during tight cash flow period.
Rare but strategic!
Calculate Your Cost →How to Negotiate a Seller-Paid Buydown
Step 1: Get Pre-Approved First
Show seller you're serious. Pre-approval = stronger negotiating position.
Get Pre-Approved Now →Step 2: Research Market Conditions
Slow market (60+ days on market) = seller more likely to accept. Hot market = harder to negotiate.
Step 3: Include in Purchase Offer
Add clause: "Seller to pay $8,000 toward 2-1 buydown at closing." Be specific with amount and type.
Step 4: Frame as Win-Win
"Buydown helps me afford the home at asking price. Without it, I need to offer $10K less." Seller saves money vs price reduction.
💡 Negotiation Tip:
Buydown costs seller $6K-8K. Price reduction costs seller $10K-15K (after agent commission).Buydown is cheaper for seller! Use this in negotiations.
Buydown vs Price Reduction: Which Is Better?
| Factor | 2-1 Buydown | $10K Price Reduction |
|---|---|---|
| Seller Cost | $6,000-8,000 | $10,000 + $600 commission |
| Year 1-2 Savings | $9,000-12,000 | $2,400 ($200/mo × 12) |
| Long-Term Savings | $0 (year 3+) | $72,000 (30 years) |
| Appraisal Impact | None (price stays same) | Lower appraised value |
| Best For | Short-term cash flow relief | Long-term homeowners |
Bottom Line: Buydown = better for seller (lower cost), better for buyer short-term (bigger savings years 1-2). Price reduction = better long-term (permanent savings). Negotiate both if possible!
Frequently Asked Questions
Ready to Save $300-600/Month with a Buydown?
Get pre-approved and negotiate seller-paid buydown. Compare offers from 50+ lenders.
Get Pre-Approved with Buydown Option →✓ 48-hour approval ✓ Buydown negotiation support ✓ No obligation ✓ Save thousands
Disclaimer: Buydown availability, costs, and terms vary by lender, loan type, and market conditions. This guide provides general information for educational purposes. Consult with licensed mortgage professionals for personalized advice. Seller concessions are subject to lender limits and appraisal requirements.