FOR HOME BUYERS
Temporary Buydown Loan: Lower Initial Mortgage Payments
Temporary buydown loans reduce your mortgage interest rate for the first 1–3 years, helping you ease into homeownership with lower initial monthly payments. A great option in rising rate environments, buydowns are often funded by sellers or lenders.
Key Requirements:
Lower Initial Payments
Save hundreds monthly for 1–3 years.
Smooth Transition
Gradual increase to full payment.
Flexible Use
Available on fixed-rate mortgages.
Third-party contributions
Often funded by seller, builder, or lender.
Guidelines for this Loan
If your details are close to these guidelines, we encourage you to apply or contact us. Even if you don’t qualify for an adjustable-rate mortgage, we could have other options for you.
Qualify at Full Rate
Estimate and Explore
Calculators are a great way to learn and see what’s possible.
Temporary Buydown Calculator
A temporary buydown lowers the payment for the first years of the loan using money placed in escrow, most often by the seller. See the payment each year and what funding it costs.
The loan
The note rate does not change. An escrow account funded at closing covers the difference each month, and the payment steps up to the note rate once the buydown period ends.
You qualify at the note rate, so the buydown lowers the payment without changing what you can borrow. If the loan is paid off or refinanced before the buydown ends, unused escrow funds are credited toward the payoff.
| Period | Rate | P & I | Saved |
|---|
- Total buydown cost
- $0
- Loan amount
- $0
- Taxes & insurance
- $0
- Year one total payment
- $0
The escrow account is funded at closing, most often by the seller as a negotiated concession.
Estimates only, for illustration. Not a loan commitment, an offer of credit, or a rate quote. Actual figures depend on underwriting, credit, income, assets, appraisal and property eligibility. Align Lending LLC, NMLS #2041154, is an independent mortgage broker and does not lend directly. Equal Housing Opportunity.
Down Payment Calculator
Learn how much cash you need to buy the home in your mind.
Get More In-Depth Details
Articles that give you more information about this loan and explain how mortgages work.
Frequently Asked Questions
Answers to questions about this loan we heard from people like you during research.
What Is a 2-1 Buydown?
Your rate is 2% lower in year one and 1% lower in year two. It returns to full rate in year three.
Who Pays for the Buydown?
Usually the seller or lender. It can’t be paid by the borrower directly.
What Happens After the Buydown Period?
Your mortgage payment adjusts to the original note rate.
Can I Refinance Before It Adjusts?
Yes. Many buyers refinance before the full payment kicks in.
Is It Available on All Loan Types?
It’s commonly offered on FHA, VA, and conventional fixed-rate mortgages.
