In today’s fluctuating interest rate environment, homebuyers are increasingly exploring creative solutions to make mortgage payments more affordable—especially during the initial years of homeownership. One of the most effective and popular tools in today’s mortgage market is the Temporary Rate Buy Down.
A Temporary Rate Buy Down is a financing strategy where the interest rate on a mortgage is temporarily reduced for the first few years of the loan. This allows borrowers to enjoy lower monthly payments upfront, easing the transition into homeownership or investment.
At Done In ONE Mortgage, empowered by NEXA Mortgage, we specialize in wholesale mortgage solutions that help our clients in Las Vegas save more and qualify more easily. Temporary rate buy downs are one of the most powerful tools we recommend to today’s cost-conscious buyers, and this blog will walk you through everything you need to know.
A Temporary Rate Buy Down reduces your interest rate for a set period—typically 1, 2, or 3 years—before reverting to the full note rate for the remainder of the loan term. The most common formats are:
Let’s say you lock in a 30-year fixed loan at 6.5%:
The cost of the buy down is typically paid upfront by the seller, builder, or lender and deposited into an escrow account to subsidize the lower payments during the buy-down period. After the temporary period ends, your mortgage payment increases to reflect the original interest rate.
With mortgage rates climbing from historic lows over the last two years, buyers are looking for relief and flexibility. That’s where temporary buy downs have surged in popularity. Here’s why:
Rising home prices and higher interest rates have made affordability a challenge for many buyers. A buy down helps ease that initial financial burden, making monthly payments more manageable when cash flow is tightest—typically during a move or home renovation.
Many economists and analysts predict that the Federal Reserve may begin cutting interest rates again in late 2024 or 2025. If this happens, homeowners may refinance before the temporary buy down period ends, meaning they never reach the full rate.
In essence, a buy down acts as a bridge loan strategy, giving borrowers short-term payment relief while waiting for better long-term refinancing opportunities.
In competitive markets like Las Vegas, sellers may prefer to offer a temporary buy down as a buyer incentive instead of cutting the asking price. A buy down can dramatically reduce the buyer’s monthly payment—often more than a price reduction would—while keeping the home’s market value intact.
For first-time homebuyers managing new expenses—moving costs, furnishings, renovations—a temporary rate reduction eases the financial pressure during the adjustment period. It also helps build confidence in homeownership as buyers grow their income over time.
While both strategies involve reducing your interest rate, the temporary buy down differs from a permanent buydown in several important ways:
| Feature | Temporary Buy Down | Permanent Buydown |
| Duration | 1 to 3 years | Life of the loan |
| Payment Reduction | Temporary | Long-term |
| Upfront Cost | Paid into escrow | Paid to permanently lower the rate |
| Best For | Short-term savings, expected refinance | Long-term stability |
| Funding Source | Often seller, builder, or lender | Typically borrower |
At Done In ONE Mortgage, we help our clients evaluate both options to determine the best fit for their goals—whether they’re planning to refinance, hold long-term, or sell within a few years.
Temporary buy downs are not one-size-fits-all, but they can be an ideal solution for several buyer types:
Helps ease into the financial responsibilities of homeownership while managing startup costs.
Expecting raises or career advancement? Buy downs let you grow into your mortgage.
Many builders offer 2-1 buy downs as part of closing incentives—great for buyers who need time to settle in.
Offering a buy down can attract more buyers without needing a price cut.
Reduces carrying costs on rental properties during the initial lease-up phase, improving short-term ROI.
One of the best aspects of temporary buy downs is that they’re typically not funded by the buyer. Instead, they are often:
The amount needed to fund the buy down depends on the loan amount and the size of the rate reduction, but it generally falls between 1% and 3% of the loan amount.
We guide our clients through negotiating buy downs during the purchase process, ensuring they get the best deal while keeping their cash to close as low as possible.
Las Vegas is known for its booming real estate market, with median home prices still hovering around the $400,000 mark. Combined with today’s higher mortgage rates, monthly payments have climbed—leading more buyers to seek creative financing strategies.
Temporary rate buy downs are particularly attractive in Las Vegas because:
At Done In ONE Mortgage, we work closely with buyers, sellers, and agents to structure buy downs that make deals work in today’s climate.
There are dozens of lenders and mortgage companies in Las Vegas—but none deliver the value, service, and results like Done In ONE Mortgage. As part of NEXA Mortgage, the #1 mortgage brokerage in America, we offer unmatched advantages:
We shop over 190 lenders to find the lowest rates and best products available. Our clients don’t pay retail—they pay wholesale.
We don’t do cookie-cutter loans. We’ll build a customized buy down plan for your specific financial needs and match it with sellers, builders, or lenders to maximize your benefit.
Our loan officers know the local market and have deep relationships with top builders and real estate professionals—giving you an edge.
We make pre-approvals simple, fast, and reliable. You’ll be in a stronger position to negotiate seller-paid buy downs when you’re fully pre-approved.
Our team walks you through every step—from pre-approval to closing—ensuring you understand your options and take full advantage of today’s market opportunities.
A temporary rate buy down is a powerful financial tool that can make homeownership more affordable during the first years of your loan—especially in today’s higher-rate environment.
Whether you’re a first-time buyer, investor, or seasoned homeowner, a buy down may offer the flexibility and savings you need to confidently move forward.
With Done In ONE Mortgage, you’ll have access to:
Let’s talk about how a temporary rate buy down can work for your unique situation.
📞 Call us today at (702) 555-1234
🌐 Visit www.doneinonemortgage.com
📅 Schedule your free consultation now and discover the Done In ONE difference.
