1-0 TEMPORARY RATE BUYDOWN
A lower payment for year one.
A 1-0 buydown reduces your effective interest rate by 1% during the first year, then returns to the full note rate—creating short-term breathing room as you settle into your home.
ONE YEAR OF RELIEF
HOW IT WORKS
One lower year. One simple transition.
A temporary buydown uses funds set aside at closing to make up the difference between the reduced payment and the payment at the full note rate.
Year one
Your effective rate is 1 percentage point below the note rate.
Year two & beyond
Your payment returns to the full note rate for the remaining term.
PAYMENT ESTIMATOR
See the first-year difference.
Adjust the loan amount and note rate to see an illustrative principal-and-interest payment schedule.
Open our full mortgage calculator →WHO CAN FUND IT?
More than one way to create savings.
Seller-paid
Seller concessions can be allocated toward the temporary buydown fee, subject to applicable contribution limits.
Lender-paid
The lender or broker covers the fee, which may include a loan-level pricing adjustment and is disclosed in closing costs.
Agent-paid
Available real estate agent credit can cover the fee, with any remaining eligible balance covered by seller concessions.
AT A GLANCE
Is a 1-0 buydown available for your loan?
Eligibility depends on occupancy, transaction type, underwriting, and the selected product.
Commonly eligible
- Conventional fixed-rate loans
- Eligible conventional ARMs
- FHA and VA purchases
- Select Jumbo programs
- HomeReady® and Home Possible®
Common exclusions
- USDA*
- One-Time Close New Construction*
- RefiNow® and Refi Possible®
- Texas 50(a)(6) conventional fixed
LIMITED-TIME LENDER-PAID INCENTIVE
1-0 buydown cost reduced to 25 bps.
For eligible UWM purchase locks from July 1 through August 31, 2026, a lender-paid credit may offset much of the standard buydown cost.
New locks through August 31, 2026. Product and program restrictions apply.
WHY CONSIDER IT?
A softer landing for the first year.
Lower initial payments
Keep more room in your monthly budget during the first year of homeownership.
Time to adjust
Ease into the full payment as income, savings, or other financial priorities evolve.
Seller strategy
A seller concession toward a buydown may create more immediate value than a price reduction.
FREQUENTLY ASKED
Questions, answered.
Do I qualify using the reduced payment?
Generally, no. Borrowers typically qualify using the full note rate and full principal-and-interest payment.
Is a 1-0 buydown the same as an adjustable-rate mortgage?
No. The underlying note rate does not change because buydown funds subsidize the first year.
What happens if I sell or refinance?
Treatment depends on the funding option and loan program. Ask your loan professional to confirm your specific transaction.
Can I recast during the buydown?
Seller-paid temporary buydown loans are generally not eligible for recast until the buydown period ends.
LET'S RUN THE NUMBERS
Could a 1-0 buydown make your next move easier?
Connect with Buena Vista Lending Group for a personalized comparison.
