As the U.S. housing market continues to reel from spiked mortgage rates, buyers and sellers alike are increasingly turning to mortgage rate buydowns.
Mortgage rate buydowns can vary, but with a 2-1 rate buydown, a seller essentially pays a lump sum of money to reduce the buyer’s rate by 2 percentage points in the first year and 1 percentage point in the second year. By the third year, the buyer pays the note rate.
