Definition
A financing technique where someone pays upfront to reduce the interest rate on a mortgage, either temporarily or permanently. It's like paying for a discount on your discount.
Example Usage
The builder offered a 2-1 buydown to make the homes more affordable in the first two years.
Origin
Developed during high-interest periods in the 1980s as a creative financing solution
Fun Fact
Sellers often use buydowns as incentives during slow markets rather than reducing the sale price, because optics matter.
Source: Mortgage financing terminology
Related Terms
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See “buydown” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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