2/1 Buydown vs. Permanent Buydown: Which Actually Saves You More?

December is one of the best months of the year to negotiate seller credits, and that makes it the perfect time to explore payment-lowering tools like the 2/1 buydown and the permanent buydown. Both reduce your monthly payment — but they work in very different ways.

Here’s the simple breakdown buyers should know.

1. What a 2/1 Buydown Does (Short-Term Savings)

A 2/1 buydown lowers your rate by:

• 2% in Year 1

• 1% in Year 2

• Back to normal in Year 3

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This creates meaningful short-term relief, especially for first-time buyers or anyone expecting a refinance opportunity in the next 12–24 months.

Best for:

• Buyers planning a future refinance

• Buyers with rising income

• Anyone who wants lower payments while settling into the home

• Situations where seller credits are available

  
  

2. What a Permanent Buydown Does (Long-Term Savings)

A permanent buydown lowers your rate for the entire life of the loan.It costs more upfront, but the savings often stack up over time — especially if you plan to stay in the home 7+ years.

Best for:

• Buyers planning to hold the property long-term

• Buyers with stable income looking for predictability

• Situations where seller credits are large enough to reduce out-of-pocket costs

  
  

3. How Seller Credits Tip the Scales

December sellers tend to be motivated.That creates room to negotiate credits that can pay for:

• A 2/1 buydown

• A permanent buydown

• Closing costs

• A mix of the above

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When sellers are willing to help, buyers can choose whichever structure fits their long-term plan.

4. Which One Actually Saves You More?

It depends on your timeline.

A 2/1 buydown almost always yields larger short-term savings.

A permanent buydown produces larger lifetime savings — if you stay long enough.

This is why we run the scenarios side by side.

5. Why December Is Ideal

• Higher seller credit availability

• Less buyer competition

• Steady rate environment

• Easier negotiation leverage

• Clearer payment expectations heading into 2026

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The market quiets down — but the strategy gets sharper.

Bottom Line

There’s no one-size-fits-all answer.

The right buydown depends on your goals, timeframe, and financial strategy.

But with December seller credits, both options can become extremely affordable.

Want to see your 2/1 vs. permanent buydown side-by-side comparison?👉 https://apmobile.apmortgage.com/homehub/signup/mbelfor@apmortgage.com