The Lender-Paid Buydown Hack: Lower Payments Without Higher Cash-to-Close

Most buyers assume the only way to lower their payment is by paying points or increasing their down payment.

But there’s another option that’s often overlooked: the Lender-Paid Buydown (LPB).

What Is a Lender-Paid Buydown?

With LPB, the lender provides a credit at closing that permanently lowers your interest rate. It reduces your monthly payment without increasing your cash-to-close.

The trade-off?

You accept a slightly higher rate before the credit — and the lender’s credit reduces it back down.For many buyers, the final net rate is still lower than standard pricing.

Why LPB Works

This strategy is especially useful for:

• Payment-sensitive buyers

• First-time buyers with limited cash

• Buyers who want a lower payment without draining savings

• Borrowers combining LPB with DPA or seller credits

  
  

Example

Standard rate: 7.00%

Lender-Paid Buydown rate: 6.625% (via LPB credit)

Monthly savings: ~$250/mo on a standard $600k loan

Cash-to-close increase: $0

When It Makes Sense

LPB works best when:

• Buyer wants payment relief

• Buyer doesn’t want to increase upfront costs

• Seller credits are scarce or being used for other items

• Borrower plans to refinance later

Bottom Line

A lender-paid buydown is a clean strategy for reducing your payment today while keeping your cash position strong. It's one of the best “quiet tools” in lending — especially for buyers who want affordability without additional cost.

If you want to see LPB pricing alongside your standard rate quote, I can run a comparison in minutes.

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