Arizona Mortgage Rate Buydown
Lower Your Arizona Mortgage Payment with a Rate Buydown — Ask the Seller to Pay
A 2-1 buydown can reduce your rate by 2% in year one and 1% in year two. Amber Tanner explains how it works and how to negotiate seller-paid buydowns in Arizona.
Types of Mortgage Rate Buydowns
2-1 Buydown
Rate is reduced by 2% in year one and 1% in year two, then settles at the note rate for the remaining term.
On a 7% note rate: Year 1 = 5%, Year 2 = 6%, Year 3+ = 7%
1-0 Buydown
Rate is reduced by 1% in year one only. Lower upfront cost than a 2-1 buydown with immediate payment relief.
On a 7% note rate: Year 1 = 6%, Year 2+ = 7%
Permanent Points
Pay discount points at closing to permanently reduce your interest rate for the life of the loan.
1 point (1% of loan) typically buys 0.25% rate reduction
3-2-1 Buydown
Rate reduced by 3% in year one, 2% in year two, 1% in year three. Maximum short-term payment relief.
On a 7% note rate: Year 1 = 4%, Year 2 = 5%, Year 3 = 6%, Year 4+ = 7%
How to Get the Seller to Pay for Your Buydown
In Arizona's current market, many sellers are willing to offer concessions. Amber Tanner helps buyers negotiate seller-paid buydowns as part of the purchase contract — reducing your upfront costs to zero while still lowering your monthly payment.
Rate Buydown FAQ
What is a 2-1 mortgage rate buydown?
A 2-1 buydown temporarily reduces your mortgage rate by 2% in the first year and 1% in the second year. In year three and beyond, you pay the full note rate. The cost is typically paid by the seller as a concession.
Who pays for a rate buydown in Arizona?
Buydowns can be paid by the seller, builder, or buyer. In today's Arizona market, many sellers offer buydowns as a concession to attract buyers.
Is a 2-1 buydown worth it?
A 2-1 buydown makes sense if you expect your income to increase over the next two years, or if you plan to refinance before the buydown period ends. Amber runs a break-even analysis for every client.
What happens to the buydown funds if I refinance?
If you refinance during the buydown period, the unused buydown funds are typically applied to reduce your loan balance.
Can I get a rate buydown on a VA or FHA loan in Arizona?
Yes. Rate buydowns are available on conventional, FHA, and VA loans in Arizona. The rules vary slightly by loan type.
See How Much a Buydown Could Save You
Amber runs a free payment comparison showing your savings with and without a buydown.