Seller-Paid Rate Buydowns in Raleigh NC: How a 2-1 Buydown Works and When to Ask for One
A seller-paid 2-1 buydown is a concession where the seller deposits a lump sum at closing to temporarily reduce the buyer’s interest rate — by 2% in year one and 1% in year two — before returning to the full note rate in year three. On a $450,000 purchase in Raleigh with a 6.5% note rate, that means your effective rate is 4.5% in year one (saving roughly $490 per month) and 5.5% in year two (saving roughly $245 per month). The seller funds this upfront, typically for $8,000 to $10,000 — far less costly than an equivalent price reduction, which would save the buyer just $50 to $60 per month per $10,000 cut.
