What is a mortgage rate buydown and how does it help buyers?

A mortgage rate buydown is a seller-offered credit that temporarily or permanently reduces the buyer's interest rate, effectively lowering monthly mortgage payments. For example, a two percent buydown credit can decrease loan payments more than equivalent price reductions, improving affordability and buyer comfort. This tool is especially useful when monthly cost, rather than purchase price, is the barrier. Buyers experience immediate savings, while sellers can attract more competitive offers. It's a strategic concession that aligns with today's focus on monthly payment comfort zones.