What is the 2-1 Buy Down Program?

The 2-1 Buy Down program allows the homebuying to pay two percent lower their first year of their mortgage and a slightly higher rate the second year before paying the full rate the rest of the loan period. A buydown can benefit all parties involved as it can help to sell a home quicker, or give you as the homebuyer an extra incentive to make the purchase.


  • All conventional (fixed and ARM) and FHA (fixed rate only) loans
  • Excludes manufactured homes
  • Seller paid only

Example of a 2-1 Buydown Mortgage

If the prevailing interest rate on 30-year mortgages is 7%, a homebuyer could get a mortgage that charged just 5% in the first year, then 6% in the second year, and 7% after that.

If the homebuyer took out a $300,000, 30-year mortgage, for example, then their monthly payments during the first year would be $1,610. In the second year, they would pay $1,799. After the end of the second year, their monthly payment would rise to $1,996, where it would stay for the remainder of the mortgage.