What is a 2-1 buydown Boston condo for sale mortgage

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What is a 2-1 buydown Boston condo for sale mortgage

A 2-1 buydown is a temporary mortgage financing option that lowers the interest rate for the first two years of the loan, with the rate increasing by 1% each year until it reaches the full, fixed rate in the third year. This provides borrowers with lower initial monthly payments, making homeownership more affordable initially, especially in a competitive market or for those with a short-term financial goal.

How it works for Boston condo for sale condos:

Year 1: The interest rate is 2% lower than the fully indexed rate.
Year 2: The interest rate is 1% lower than the fully indexed rate.
Year 3 onwards: The interest rate becomes the full, fixed rate for the remainder of the loan term.

Updated: Boston condo for sale blog 2025