buy-down

American  

[bahy-doun] / ˈbaɪˌdaʊn /

noun

1. a subsidy for a long-term mortgage offered by a third party, as a builder or developer, to lower interest rates for a buyer in the early years of the loan.

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Example Sentences

The cost of such insurance over the life of the loan could outweigh any benefit a borrower would receive from using their funds to fund a temporary buy-down.

From Washington Post • Sep. 14, 2022

The party providing the buy-down funds will normally make a lump-sum payment into an escrow account at closing.

From Washington Post • Sep. 14, 2022

Cox: The 2-1 buy-down program is a phenomenal way for buyers to ease into their new mortgage payment.

From Washington Post • Sep. 14, 2022

For example, the interest rate on a 2-1 buy-down would be 2 percent below the note rate for the first year and 1 percent below the note rate for the second.

From Washington Post • Sep. 14, 2022

For buyers who qualify for a mortgage but may be worried about their short-term financial picture, a temporary buy-down may give them the confidence to take out a mortgage and purchase the home.

From Washington Post • Sep. 14, 2022