2 1 buydown mortgage


Define: 2 1 buydown mortgage

Definition: A 2 1 buydown mortgage is a type of mortgage with a set of two initial primary interest rates. The interest rate for the first year is 2 percent lower than the permanent interest rate and 1 percent lower the second year. The initial interest rate is paid for either by the borrower to qualify them for a mortgage or by a builder as an incentive to purchase a home.


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