Buydown

Someone—often a seller, builder, or borrower—pays money at the start so the monthly payment is lower for a limited time. After that period, the payment follows the loan’s lasting terms. A 2-1 buydown is one common temporary pattern, not a second product. Paying discount points to change the lasting rate is related but not this page’s only meaning. This page does not say a buydown is a bargain.

CFPB describes a temporary buydown as a lower payment for a limited time in exchange for an up-front fee or a higher rate later. That consumer meaning is the PRIMARY evidence. Year-by-year structures are examples, not the definition.

Payment-change questions often come from an expired buydown, not from an adjustable-rate reset.

A seller funds a temporary buydown at closing. Casey’s first-year payment is lower than the lasting principal-and-interest amount. When the buydown ends, the payment rises to the amount the note requires.

• Discount points

A buydown is not automatically discount points, and a 2-1 structure is not a second product.