What’s a 2-1 Buydown—and How Can It Save You Thousands in the First Two Years?
We love it when an offer comes together!
It’s that time of year again: Seller Concession Season.
As summer listings sit longer, more sellers are offering flexibility. One of the smartest tools in your buyer toolkit right now? A 2-1 buydown—a seller-paid way to significantly reduce your mortgage payments early on.
What Is a 2-1 Buydown?
A 2-1 buydown is a temporary interest rate reduction paid for by the seller at closing.
• In Year 1, your rate is 2% lower than market.
• In Year 2, it’s 1% lower.
• From Year 3 on, it reverts to the original fixed rate.
This structure gives you time to refinance later—when rates improve—without taking on high payments right away. But let’s look at the math.
Real-World Comparison: $850K vs $815K
Let’s say you’re buying a home listed at $850,000, putting 20% down, with a 30-year fixed mortgage and today’s market rate of 7%.
Option 1: $850K with a 2-1 Buydown
• Loan Amount: $680,000
• Year 1 at 5%: $3,652/mo
• Year 2 at 6%: $4,074/mo
• Year 3+ at 7%: $4,522/mo
• Total 2-Year Savings: ~$15,816
• Seller Cost for Buydown: ~$13,000
Option 2: $815K at Standard 7% Rate
• Loan Amount: $652,000
• Fixed Monthly Payment: ~$4,338/mo
• No seller concessions
The Takeaway
Your upfront payments are much lower with a buydown.
Your monthly payment in Year 1 is ~$686/month less than if you negotiated a $35K discount but kept the full 7% rate.
Sellers often prefer it too, because they’re only giving up ~$13K vs. a $35K price cut—and still marketing at full asking.
Why It Works
This strategy creates a win-win:
✅ You save more, when it matters most (hello, moving expenses).
✅ Sellers net more than they would with a lowball offer.
✅ You’re more likely to get the deal done.
How to Ask for a Seller Concession the Right Way
Want to include a 2-1 buydown in your offer? Here’s how to do it strategically:
Write your offer at or near full list price—so the seller sees the number they want.
In the offer’s additional provisions, include a line like:
“Seller to credit Buyer $13,000 at closing to be used toward a temporary rate buydown and/or closing costs.”
The amount should be based on your loan size and rate scenario. Your lender can help calculate the cost of the buydown ahead of submitting the offer.
Pro tip:
Even if the seller doesn’t fully understand the mechanics of a 2-1 buydown, they’ll appreciate an offer that gives them their full number on paper—and helps the buyer afford the home.
Yes, they’re taking a small haircut on their net proceeds (typically $10K–$15K), but that’s often far less than they’d lose by accepting a lower offer or doing a price drop. And it can mean the difference between sitting on the market… or closing the deal.
Ready to explore creative ways to make your home purchase more affordable—without lowballing? At The Boston Home Team, we specialize in helping buyers across Jamaica Plain, Roslindale, Somerville, and greater Boston make smart, strategic moves in every kind of market. Whether you’re a first-time buyer in Boston or planning your next move, we’ll help you structure offers that work—for both sides.
Reach out anytime to talk through seller concessions, 2-1 buydowns, or other Boston real estate strategies that can make your offer stand out.
