For agents
Three temporary buydowns, priced for the ask
On a $1,600,000 loan at 7.375%, the asks run from $12,826.61 for the 1-0 to $74,668.62 for the 3-2-1 — buying $1,068.88/mo and $3,062.24/mo off the first year respectively.
Before you go back to the listing side with a number: here is what each structure costs in escrow, on this deal. The concession you negotiate has to cover one of these figures, and none of them touches the sale price.
The loan
30-year fixed. Any decimal — 6.625, 6.62, whatever you were quoted.
Loan amount $1,600,000 · payment at the note rate $11,050.80/mo. Principal and interest only — an illustration from the numbers above, not a quote, an approval, or an offer of credit.
What your buyer is actually asking for
That is the dollar figure the seller (or builder) puts into an escrow at closing. It is not paid to the lender and it does not buy the rate down — it sits in an account and covers the gap between what you pay and what the note asks, month by month, until it runs out.
The three temporary buydown structures, priced
1-0 buydown
1 yearOne year at 1% below the note rate, then the full payment.
Ask the seller for
$12,826.61
Seller-funded, or builder-funded — a builder credit is seller-funded here. This is also the one structure a lender-funded buydown is typically available on.
The 1-0 buydown year by year: rate, payment and monthly saving Year Rate Payment You save 1 6.375% $9,981.92 $1,068.88/mo 2+ 7.375% $11,050.80 nothing 2-1 buydown
2 yearsYear one at 2% below, year two at 1% below, then the full payment.
Ask the seller for
$37,921.76
Seller-funded, or builder-funded — a builder credit is seller-funded here. Lender-funded buydowns are typically only available on the 1-0, not this one.
The 2-1 buydown year by year: rate, payment and monthly saving Year Rate Payment You save 1 5.375% $8,959.54 $2,091.26/mo 2 6.375% $9,981.92 $1,068.88/mo 3+ 7.375% $11,050.80 nothing Needs a seller or builder credit — a lender will not usually fund this one.
3-2-1 buydown
3 yearsYear one at 3% below, then 2%, then 1%, then the full payment.
Ask the seller for
$74,668.62
Seller-funded, or builder-funded — a builder credit is seller-funded here. Lender-funded buydowns are typically only available on the 1-0, not this one.
The 3-2-1 buydown year by year: rate, payment and monthly saving Year Rate Payment You save 1 4.375% $7,988.56 $3,062.24/mo 2 5.375% $8,959.54 $2,091.26/mo 3 6.375% $9,981.92 $1,068.88/mo 4+ 7.375% $11,050.80 nothing Needs a seller or builder credit — a lender will not usually fund this one.
What happens if your buyer refinances before the escrow runs out
The money that has not been used is not lost. A temporary buydown is not paid to the lender to purchase anything — it sits in an escrow and is drawn down month by month. If the loan is refinanced or paid off while there is still a balance in that account, the usual treatment is that the remainder is applied to the principal, so it comes off what is owed rather than disappearing.
That is the opposite of a permanent buydown, where the points are paid at closing and an early refinance forfeits whatever benefit has not been used yet. It is also why a temporary structure can be the safer place to put a concession when nobody knows how long the loan will actually last. Exactly how a remaining balance is handled is a matter of program, investor and servicer rules — ask before relying on it.
A temporary buydown does not change the note rate and does not change what a lender qualifies the borrower at — the escrow simply covers a difference for a fixed period and then runs out. Who may fund one, and on which structure, is a matter of program and investor rules. Estimated range only, not a quote or a commitment to lend. It's based on one lender's actual pricing on a single day in September 2026 for one loan program — real pricing changes daily and depends on your loan program, loan amount, credit profile, and current market conditions. Contact Mike directly for real numbers based on your scenario.
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