High mortgage rates?
Lower your payment
for the first 2 years.
A seller-funded 2-1 buydown could give your budget breathing room.
EXPLORE YOUR HOME-BUYING OPTIONS →WATCH DAN EXPLAIN IT ↓Dan Frio · NMLS #246527 · Illustrative rates, not a current rate offer.
5.5%. 6.5%. Then 7.5%.
2 percentage points below note rate
1 percentage point below note rate
Full scheduled P&I payment
Monthly principal & interest only. Taxes, insurance, mortgage insurance, HOA dues and fees excluded. 5.5% and 6.5% are temporary payment-calculation rates, not note rates or APRs.
Your monthly P&I
Same loan. Your share of the payment increases.
Two years of payment support
Let’s walk through the numbers.
In the video, Dan walks through a $250,000 loan at 7.5%: about $329 a month less in year one and $168 less in year two, for a $5,957 buydown. The numbers on this page use a $400,000 loan.
Ask for a credit. Compare the impact.
AI-generated illustration.
Target the first 24 payments.
Subject to lender approval, program limits and a written agreement. Other closing costs require separate planning.
Review days on market and price reductions with your Realtor.
Ask your lender for the exact subsidy and full housing payment.
Compare the seller’s offer with a price cut or closing-cost help.
$9,531 across 24 months
Reduced borrower P&I outlay versus full payments, funded by the subsidy. This is not guaranteed lifetime savings.
Temporary relief or a lower price?
2-1 buydown credit
Loan stays at $400,000.
Equal price reduction
Example loan: $390,469.
Price-cut case keeps the same dollar down payment and reduces the loan dollar for dollar. Same 7.5% note rate and 30-year term assumed. Not a lifetime-cost comparison; actual pricing and loan-to-value effects may differ.
Stop guessing.
Build your buying plan.
Know your payment. Compare seller credits. Make an informed offer.
START WITH TRU FOUNDATIONS →Bring your numbers to your mortgage advisor. Seller participation and loan approval are not guaranteed.
Talk it through with Dan.
I’m Dan Frio, a mortgage advisor with PBT Bancorp and the host of The Rate Update on YouTube, where more than 40,000 subscribers follow my daily mortgage rate updates. I’ve been helping people buy and refinance homes for 38 years.
My team works differently from a single lender. You fill out one application with one credit pull, and we compare more than 30 mortgage lenders to find the program and price that fit you. I’ve been on air on NewsNation and quoted in Yahoo Finance and Homes.com on mortgage rates and the housing market.
- One application. One credit pull. 30+ lenders compared.
- Already have a quote? Get a free Loan Estimate Review before you sign.
- Call(844) 775-5626 or Dan directly at (630) 360-3490
- Emaildan@therateupdate.com
Your 2-1 buydown numbers.
Example: $400,000 loan, 30-year fixed. Plug in your own loan amount and rate with our free calculator.
OPEN THE 2-1 BUYDOWN CALCULATOR →P&I estimate only. Add taxes, insurance, mortgage insurance, HOA and fees. Actual lender calculations may differ.
Example assumptions, sources & important details
Illustration: $400,000, 30-year fixed, 7.5% note rate. Payments use unrounded amortization calculations; displayed totals are rounded. The note rate remains unchanged. A funded subsidy covers part of the scheduled payments during the first two years.
Subsidy = 12 × (full payment − year-one borrower payment) + 12 × (full payment − year-two borrower payment). Seller contributions are subject to program limits. Remaining funds after an early payoff are handled under the agreement and applicable rules; a cash refund is not assured.
Sources reviewed October 20, 2026. Future refinancing requires new approval and may involve costs. Vimeo playback depends on video privacy settings and your publishing platform permitting embeds.