Seattle Mortgage Buydown Options
3-2-1, 2-1, and Permanent Buydowns Explained
A mortgage buydown is a financing strategy that allows a buyer, seller, or builder to pay
discount points upfront to reduce the interest rate on a home loan. In Seattle, WA, where home prices and monthly payments can be higher than the national average, buydown options are commonly used to improve affordability and loan qualification.
Buydowns are most often used on purchase transactions and may be structured as either
temporary or permanent, depending on the borrower’s goals and financial outlook.
What Is a Mortgage Buydown?
A buydown allows interest to be prepaid at closing so the loan carries a
lower effective interest rate, either temporarily or for the full loan term.
- Lower monthly mortgage payments
- Improved debt-to-income (DTI) qualification
- Greater purchasing power
- More effective seller or builder incentives
Permanent Buydown
A permanent buydown reduces the interest rate for the
entire life of the loan, typically a 30-year fixed mortgage.
- Often paid by sellers or builders
- Creates long-term payment stability
- Frequently less costly than a price reduction
Temporary Buydowns
3-2-1 Buydown
- Year 1: 3.00% below the note rate
- Year 2: 2.00% below the note rate
- Year 3: 1.00% below the note rate
2-1 Buydown
- Year 1: 2.00% below the note rate
- Year 2: 1.00% below the note rate
Seattle Buydown Comparison
| Buydown Type |
Rate Structure |
Reduced Payment Period |
Best For |
|---|
| 3-2-1 Buydown |
−3%, −2%, −1% |
3 years |
Expected income growth |
| 2-1 Buydown |
−2%, −1% |
2 years |
Short-term payment relief |
| Permanent Buydown |
Fixed lower rate |
Full loan term |
Long-term homeowners |
Actual rates, payments, and costs vary based on borrower qualifications, loan program, and market conditions.