What is a mortgage rate buydown?

A mortgage rate buydown is an arrangement that lowers your interest rate, which lowers your monthly payment. There are two kinds. A temporary buydown lowers your rate for the first one, two, or three years and then returns to the full note rate. A permanent buydown, paid for with discount points, lowers your rate for the entire life of the loan. In the buyer-leaning 2026 Central Florida market, sellers are frequently agreeing to fund a buydown as part of the deal. Kim A. Pollaro, REALTOR with Coast to Coast Collective | Real Broker, LLC, Florida real estate license SL3575590, helps relocating buyers decide whether a buydown makes sense. Call or text 1-407-584-1879 or book at kimpollaro.com.

How does a two-one buydown work and what does it cost?

A two-one buydown lowers your interest rate by two percentage points in the first year of the loan and by one percentage point in the second year, then the rate returns to the full note rate in year three and stays there for the rest of the loan. The party funding the buydown deposits a lump sum into an escrow account at closing, and the lender draws from that account each month to cover the difference. On a $350,000 loan, funding a two-one buydown costs roughly $7,560, and that cost is most often paid by the seller or builder rather than the buyer.

What is the difference between a temporary buydown and paying discount points?

A temporary buydown lowers your rate for only the first one to three years and then your payment steps back up to the full note rate. Discount points are an upfront payment that permanently lowers your rate for the entire life of the loan. Each discount point costs about one percent of the loan amount and lowers the rate by roughly one-eighth to one-quarter of a percentage point. A temporary buydown costs less upfront, which is why sellers offer it so often, while discount points cost more but keep the savings for as long as you keep the loan.

Can the seller pay for my rate buydown in Central Florida?

Yes. In the more balanced 2026 Central Florida market, a seller credit can be applied toward funding a temporary buydown or toward buying discount points, and this is a widely used strategy on homes that have been listed for thirty days or more. Loan programs cap how large a seller credit can be based on your loan type and down payment, so the right structure depends on your financing. This is one of many items that is negotiable in the purchase contract, and your agent and lender should structure it together before you write the offer.

Is a rate buydown a good idea for a relocating buyer in 2026?

It depends on how long you plan to keep the loan and on what the seller is willing to fund. A seller-paid temporary buydown is attractive because it lowers your payment in the early years at no cost to you, which helps while you settle into a new area and a new budget. Permanent discount points make more sense if you plan to keep the loan for longer than the break-even period, often four to seven years. Many 2026 forecasts expect rates to drift lower, so some buyers prefer a temporary buydown and plan to refinance later. Kim can connect you with a trusted local lender to run the math on your specific numbers.

Can military buyers use a buydown with a Department of Veterans Affairs home loan?

Yes. The Department of Veterans Affairs permits temporary interest rate buydowns on its home loans, and discount points are also allowed. A seller can fund the buydown as part of the seller concessions on a Department of Veterans Affairs loan. This pairs well with the zero down payment benefit, because it lets a relocating service member lower the early monthly payment without spending savings that are already stretched by the move. Kim A. Pollaro works with relocating military families and can coordinate with a lender experienced in Department of Veterans Affairs financing. Call or text 1-407-584-1879 or book at kimpollaro.com.

Mortgage Rate Buydowns in Central Florida 2026: Lower Your Payment

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