When rates are elevated, a rate buy-down can lower your payment — temporarily or permanently. This guide explains how buy-downs work for SCV buyers in general terms.
General education, not advice. This page explains financing, property-tax, and special-assessment concepts for Santa Clarita Valley buyers and homeowners. It is not financial, tax, or legal advice and it is not a loan offer. Mortgage rates and program terms change constantly, and tax rules depend on your specific facts. Confirm every figure and qualifying question with a licensed lender, CPA, or attorney before you act.
Temporary buy-downs (e.g., 2-1)
A 2-1 buy-down lowers your rate by about 2% in year one and 1% in year two, then settles at the full note rate. It eases the early payment shock and is often funded by a seller or builder concession. You still qualify at the full note rate.
Permanent buy-downs (points)
Paying discount points buys a permanently lower rate. Each point is an upfront cost in exchange for a lower rate for the life of the loan — worthwhile if you keep the loan long enough to recoup the cost.
Who pays for it
Buy-downs can be funded by the buyer, or by a seller or builder as a concession. In a buyer's market, asking the seller to fund a buy-down can be more valuable than a price cut for some buyers.
When each makes sense
- Temporary — you expect income to rise or plan to refinance, and want lower early payments.
- Permanent — you plan to keep the loan long enough to recoup the points.
Rates move
As a rough frame, 30-year fixed rates have hovered around ~6.5–7.0% as of 2026, but rates change daily — treat any number you see as stale and get a current quote from a licensed lender.
Qualifying and Mello-Roos
You generally qualify at the note rate regardless of a temporary buy-down, and property tax including Mello-Roos still factors into DTI. SCV Mello-Roos varies by tract — verify per parcel.
Structure a smart buy-down with Brian
Brian Cooper can help you negotiate seller- or builder-funded buy-downs on an SCV purchase. Contact Brian or call (805) 723-2498.
Frequently Asked Questions
What is a mortgage rate buy-down?
Paying an upfront cost to lower your mortgage rate — temporarily (like a 2-1) for the first year or two, or permanently by buying discount points.
What is a 2-1 buy-down?
A temporary buy-down that lowers your rate by about 2% in year one and 1% in year two before settling at the full note rate.
Who pays for a buy-down?
The buyer, seller, or builder can fund it. Seller- or builder-funded buy-downs are common concessions, especially in a buyer's market.
Do I qualify at the lower rate?
For a temporary buy-down you generally qualify at the full note rate, not the reduced starter rate. Confirm with your lender.
Is a permanent buy-down worth it?
It can be if you keep the loan long enough to recoup the cost of the points. Compare the upfront cost to the monthly savings.
Is this a loan offer?
No. This is general education, not a loan offer. Confirm current pricing with a licensed lender.
