What is a 2-1 Buydown in Mortgage Financing?

A mortgage 2-1 buydown is a type of mortgage financing option that allows a borrower to temporarily lower their monthly mortgage payments. This option can be a great way for borrowers to afford a home in the Boise, Idaho area that might otherwise be out of their price range.

2-1 Buydown Mortgage

How a 2-1 Buydown Mortgage Works

The way a 2-1 buydown works is that the lender agrees to temporarily lower the interest rate on the mortgage for the first two years of the loan. For example, if the current market interest rate is 4%, the lender may agree to lower the interest rate to 3% for the first two years of the loan. This means that the borrower's monthly mortgage payment will be lower during those two years.

In the third year of the loan, the interest rate will increase back to the original market rate, and the borrower's monthly mortgage payment will also increase. However, by this time, the borrower will have had two years to save money, which will help them to afford the higher monthly payments. Another element of the loan that may change within that time frame is the buyer's equity. It is possible that they have gained enough equity in the home to remove the mortgage insurance which can decrease the payments. Read our blog on Mortgage Insurance to learn more.

The Benefits of a 2-1 Buydown Mortgage

A mortgage 2-1 buydown can be a great option for borrowers who are looking to purchase a home but may not have the funds to afford the monthly payments at the current market interest rate. It can also be a good option for borrowers who expect their income to increase in the future, such as new graduates or those who are in the process of starting a new job.

Evaluating if a 2-1 Buydown is Right for You

It's important to note that not all lenders offer 2-1 buydown mortgages, and the terms and conditions of the loan may vary. Therefore, it's essential for borrowers to shop around and compare different options before choosing a lender. Also, be sure that you feel confident that you are able to pay the higher monthly mortgage payments in a few years when the interest rate goes back up. Discuss with your lender the options you have should your financial situation not become better after the first two years so you can be prepared for the next steps.

To learn more about the other financing options read our blog on How to Choose the Right Mortgage When Buying Your Idaho Home.


If you’re considering this type of loan in Boise, Idaho, meeting with an experienced lender would be beneficial to determine if this is a smart decision for your specific needs. Once you have determined your mortgage situation, contact one of our experienced agents to help you begin shopping for homes in the Boise, Idaho area that are within your budget.

Ready to start home shopping? Contact us!


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190 Properties
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$400,000
Neighborhood: Orchard Heights
5
Beds
3
Baths
1,600
Sq.Ft.
2001
Year Built
274
Days on Site
98849111
MLS
Beautifully renovated home with new kitchen, new vinyl flooring on first floor. New custom stone around garage, new shed with power, Jacuzzi plug in. Must come see this home, large backyard with...
$400,000
Neighborhood: Falcon Valley
3
Beds
2
Baths
1,502
Sq.Ft.
2015
Year Built
19
Days on Site
98871154
MLS
Beautiful corner-lot home. Close to Foote Park, Mill Creek Elementary, and downtown Middleton. The home is a 3-bedroom, two-bath complete with walk-in closet in the master suite. The backyard is set...
$399,990
Neighborhood: Greendale Grove North
3
Beds
2
Baths
1,446
Sq.Ft.
2023
Year Built
32
Days on Site
98869842
MLS
Up to 30K Promo! Ends March 31st. See sales agent for details. The Alturas Signature Series is a charmer! You'll love the exciting split bedroom floorplan. 3 large bedrooms, 2 bathrooms, and the...
$399,990
Neighborhood: Aegean Estates
3
Beds
2
Baths
1,522
Sq.Ft.
2023
Year Built
12
Days on Site
98871762
MLS
As beautiful as it's name, the new Olivia 1522 is just the right size for you to call home. Not only are your two bedrooms split from the master suite, all your entertaining needs are quickly...
$399,990
Neighborhood: Baraya
3
Beds
3
Baths
1,471
Sq.Ft.
2023
Year Built
12
Days on Site
98871823
MLS
Introducing the Poe 1471! This classic yet timeless floor plan will give you exactly what you need in a new home. Solid surface kitchen countertops, stainless steel appliance, and gas range. Walk in...
$399,990
Neighborhood: Rapid Creek
3
Beds
2
Baths
1,400
Sq.Ft.
2023
Year Built
12
Days on Site
98871829
MLS
The Monarch 1400 is quaint, cozy, & perfectly functional. This single level, alley load has split bedrooms land eaves the master suite as its own private escape. Stroll through the open dining and...
$399,900
Neighborhood: Heirloom Ridge
3
Beds
2
Baths
1,586
Sq.Ft.
2023
Year Built
45
Days on Site
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MLS
"The Collins" is an artful combination of thoughtful design and chic touches. The great room and casual dining area are central to the large rear patio and well-appointed kitchen complete with an...
$399,900
Neighborhood: 0 Not Applicable
4
Beds
2
Baths
1,650
Sq.Ft.
1973
Year Built
27
Days on Site
98870476
MLS
Welcome Home to your Move-In-Ready 4 bed and 2 baths on .23 acres with a partially fenced back yard inside the City of Boise! The fully remodeled home with LVP flooring throughout the home features...
$399,900
Condo: Daphne Square
3
Beds
3
Baths
1,540
Sq.Ft.
2023
Year Built
15
Days on Site
98871416
MLS
The Clancy is an exciting new lifestyle design by Berkeley Building Co.! Artfully finished in our curated Mountain Vista collection, this bright and modern home features richly stained cabinetry and...
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Condo: Chatham Towne
3
Beds
3
Baths
1,456
Sq.Ft.
2009
Year Built
7
Days on Site
98872228
MLS
Exceptional townhome convenient to Hyatt Hidden Lakes, West YMCA and the Village. This spacious townhome offers the convenience of a low-maintenance lifestyle with the comforts of newer construction...
$399,500
Condo: Goddard Creek Townhouse
3
Beds
2
Baths
1,410
Sq.Ft.
2023
Year Built
19
Days on Site
98871142
MLS
Welcome to Goddard Creek Townhomes Subdivision, the newest 55+ low maintenance subdivision in North Meridian! This is the beautiful Brook floor plan which was specifically designed with the senior...
$399,000
Condo: Carlton Bay
3
Beds
3
Baths
1,660
Sq.Ft.
2019
Year Built
58
Days on Site
98867802
MLS
Priced to Sell & Move In Ready. This no-maintenance easy living townhome offers super quick access to the greenbelt, foothills & downtown Boise or Eagle. Spacious open main level includes living...
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