Buydown comparison
Points cost cash today to buy a lower rate for as long as you keep the loan. Whether that pays off comes down to one thing: how long you stay.
Enter the points cost (percent of the loan) and the rate each option buys you down to. Leave points at 0 to skip an option.
A 2-1 buydown lowers your rate by 2% in year one and 1% in year two, then returns to the base rate for the rest of the loan. It is a common seller or builder concession — the total subsidy is paid up front into an escrow that covers the gap. Your payment is not permanently lower; it just eases the first two years.
The one question that decides it
Points are prepaid interest. They pay off only if you hold the loan past the break-even month — so if you expect to move, or to refinance when rates fall, the cash is usually better kept. Your agent will have a blunt view on how long people stay in the homes you are looking at.
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