Same House. Lower Payment.

A buydown pays some of your interest up front, often with the seller’s or builder’s money, so your monthly payment drops. Here is what that looks like on a real example.

The example · change any number Purchase price Down payment % Market rate %

Down payment $17,500Loan amount $482,50030-year fixed

Temporary Buydowns

3-2-1 vs 2-1 vs Regular Payment

Your loan is written at the market rate, but your payment starts lower and steps up each year. The difference is prepaid into an account at closing, usually by the seller or builder.

No buydown

Regular Payment

$3,210 / mo in year 1

Years 1–307.00% · $3,210

You save $0 over the buydown years No upfront cost, no savings

Two years of savings

2-1 Buydown

$2,590 / mo in year 1

Year 15.00% · $2,590

Year 26.00% · $2,893

Years 3–307.00% · $3,210

You save $11,246 over the buydown years Buydown cost ≈ $11,246, usually paid by the seller or builder

Three years of savings

3-2-1 Buydown

$2,304 / mo in year 1

Year 14.00% · $2,304

Year 25.00% · $2,590

Year 36.00% · $2,893

Years 4–307.00% · $3,210

You save $22,125 over the buydown years Buydown cost ≈ $22,125, usually paid by the seller or builder

Monthly payment	Regular	2-1 buydown	3-2-1 buydown
Year 1	$3,210	$2,590	$2,304
Year 2	$3,210	$2,893	$2,590
Year 3	$3,210	$3,210	$2,893
Years 4–30	$3,210	$3,210	$3,210

Principal and interest only. Taxes, insurance and mortgage insurance (such as FHA MIP on a 3.5% down loan) are extra. You qualify at the full market rate, and the buydown cost equals the total payment savings.

New Construction

Builder Buydowns & Forward Loan Commitments

Large builders buy blocks of below-market mortgage rates from lenders in advance. It’s called a forward commitment, and it lets them offer buyers a rate far below the market for the entire life of the loan, not just the first few years.

Builder rate % vs market rate 7.00% on the same $482,500 loan

Standard market rate 7.00% $3,210 / mo $673,130 total interest over 30 years

Builder forward-commitment rate 3.90% $2,276 / mo $336,788 total interest over 30 years

$934Lower payment every month

$11,211Saved every year

$336,343Less interest over 30 years

$354,477Same payment as a home at this price at 7.00%

How a Forward Commitment Works

01The builder pre-buys rates

Months ahead, the builder pays a lender to reserve a pool of loans at a set below-market rate.

02You use their lender

To get the rate you usually close with the builder’s preferred lender on a qualifying home by a set date.

03The rate stays for 30 years

Unlike a 2-1 or 3-2-1, it is a permanent rate, and it can make a newer home cost less per month than a resale.

What to watch for (we’ll check this for you)

Builder rates often apply only to certain homes, loan types or closing dates. The incentive may replace a price reduction or closing-cost credit, so we compare the true cost both ways. Rate pools run out, and lender fees and loan terms vary.

Ask How a Buydown Fits Your Deal New Construction With UVH Today’s Rates

Example for illustration only, not a quote or loan offer. Rates, buydown availability and costs depend on the lender, loan program, credit and the specific home. UVH · Unvieled Home is not a lender.