Is a 2-1 buydown mostly marketing, and what numbers actually determine whether it helps?

Is a 2-1 buydown worth it or just marketing?

You want to know if a 2-1 buydown actually saves money or just looks appealing in marketing materials. A 2-1 buydown reduces your mortgage rate by 2% in year one, 1% in year two, then returns to the full rate for the remaining loan term. The builder or seller typically pays the lender upfront to fund this temporary rate reduction.

The math depends on three key numbers: the buydown cost, your monthly payment savings, and how long you plan to stay in the home. Check your Loan Estimate for the total buydown cost—this appears in the seller credits section if the seller pays, or in your cash to close if you pay. Compare this upfront cost against your monthly savings over two years.

If you plan to move or refinance within a few years, the buydown saves money since you capture the payment reduction without paying the higher rate later. If you stay long-term, calculate whether the total two-year savings exceed the buydown cost. Many buyers find the lower initial payments helpful for cash flow, even when the total interest paid over 30 years is similar.

Share your Loan Estimate with the lender and ask them to show the total buydown cost versus your payment savings. They can run scenarios based on how long you expect to keep the loan.