A 2-1 temporary buydown generally reduces the borrower’s payment using a subsidy during the first two years. MyMortgageLens lets you compare those introductory payments with the full payment that follows.
Run Your Comparison →A typical 2-1 structure bases the first-year borrower payment on a rate two percentage points below the mortgage rate and the second-year payment on a rate one point below. In year three, the borrower pays the full scheduled payment at the underlying mortgage rate.
The temporary buydown changes the amount the borrower pays during the subsidy period. It does not turn the underlying mortgage into a permanently lower-rate loan. That is why MyMortgageLens keeps the mortgage amortization tied to the actual mortgage rate.
Compare the first-year payment, second-year payment, full payment after the subsidy, purchase price and other housing costs. Also ask the lender who is funding the subsidy and confirm the exact terms.