Are you wondering if a rate buydown is the smartest way to lower your monthly payment in White Plains? With prices in the upper hundreds of thousands and higher property taxes than many parts of the country, every dollar of payment relief matters. In this guide, you’ll learn how permanent and temporary buydowns work, where they make sense locally, and a simple way to test the breakeven. Let’s dive in.
What is a rate buydown?
Permanent buydown (points)
A permanent buydown happens when you or the seller pay discount points at closing to reduce your interest rate for the life of the loan. One point equals 1% of the loan amount and often lowers a conventional rate by about 0.25%, though the exact impact depends on lender pricing. You compare the upfront cost to the monthly savings and calculate a breakeven in months. Investopedia explains how points work.
Temporary buydown options
A temporary buydown lowers your effective payment for a set time, usually funded by the seller, builder, or sometimes the lender. In a 2-1 buydown, your payment is calculated 2 percentage points lower in year one and 1 point lower in year two, then it resets to the full note rate. The loan note rate stays the same. The subsidy covers the difference in those first years. See how these offers returned in higher rate markets in this overview of buydown programs.
Who pays and how it works
Buydowns can be paid by the buyer, seller, or lender, and must be disclosed by the lender. Temporary buydown funds are typically set aside so the servicer can apply the monthly subsidy automatically. Ask your lender to show the note rate, the buydown schedule, and all costs in writing.
White Plains market factors
Home prices and rates today
In recent data, typical White Plains home values have been in the mid to high $700,000s. National 30-year fixed rates in 2025 have averaged the mid 6% range, so even a small rate change can shift monthly payments meaningfully. For context, see the latest Freddie Mac mortgage rate survey.
Property taxes and monthly cost
Westchester County’s property taxes are higher than many U.S. counties, which makes total monthly carrying costs a key part of your decision. A buydown might lower the principal and interest portion by a few hundred dollars, which can still be meaningful even if taxes take a large share. Review county-level comparisons from the Tax Foundation’s property tax data.
Negotiation dynamics
In balanced or slower segments, sellers may offer a temporary buydown to boost buyer affordability without cutting price. Builders used this strategy heavily during recent high-rate periods. Learn more about why these offers reappeared in this consumer-friendly explanation.
How to know it pencils out
Step-by-step checklist
- Set your loan amount: price minus down payment.
- Confirm the quoted note rate without any buydown, then sanity check against the Freddie Mac weekly average.
- For a permanent buydown, price out points. Start with the common rule of thumb that 1 point costs 1% of the loan and cuts the rate about 0.25%, then use your lender’s exact grid. Here is a good primer on points.
- For a temporary buydown, total the payment differences for each buydown year. That sum is the one-time cost. A plain-language overview is here: how a 2-1 buydown is calculated.
- Check program rules on seller concessions so you do not exceed caps. See typical limits in this seller concessions guide.
- Ask your tax advisor about deductibility. Discount points may be deductible if IRS criteria are met. Review IRS guidance on points in the Internal Revenue Manual.
Example: buy one point on a typical loan
Assume a $760,000 purchase, 20% down, and a $608,000 loan at 6.30%. One point costs 1% of the loan, or $6,080. The monthly principal and interest at 6.30% is about $3,765. If one point lowers the rate to roughly 6.05%, the new payment is about $3,663. You save about $102 per month, so the breakeven is roughly 60 months, or about 5 years.
What it means: if you expect to keep the loan longer than 5 years, a point can make sense. If you plan to move or refinance sooner, it probably will not.
Example: a 2-1 buydown funded by the seller
Using the same $608,000 loan at a 6.30% note rate, the full payment is about $3,765. Year 1 is calculated at 4.30% with a payment near $3,007, saving about $758 per month. Year 2 is calculated at 5.30% with a payment near $3,374, saving about $391 per month. Total two-year subsidy is roughly $13,788, paid upfront by the seller into the buydown account.
What it means: the buyer gets near-term relief, and the seller keeps the contract price intact. You must be comfortable with the full payment after year two in case refinancing is not available.
Pros, cons, and pitfalls
When a buydown can work for you
- You plan to own the home and keep the mortgage beyond the breakeven point for a permanent buydown.
- You value short-term breathing room while you settle in or complete renovations, and a 2-1 aligns with your budget plan.
- Your loan program and seller concessions cap can clearly accommodate the buydown.
Risks to watch
- Temporary buydowns create payment shock when the subsidy ends. If rates do not fall or refinancing is not possible, you must afford the full payment at the note rate. Recent reporting highlights buyers who could not refinance as planned, which led to stress on budgets. Read more about this risk in coverage of buydown pitfalls.
Program and appraisal guardrails
- Concession limits vary by program, and temporary buydowns have specific product rules. Confirm eligibility with your lender and review definitions in the Freddie Mac glossary.
- Appraised value still must support the contract price. If value comes in low, the structure of concessions can affect how your lender calculates the loan-to-value. Get clarity in writing from your lender before you finalize terms.
How to structure your offer in White Plains
If you are buying
- Price out both options: a seller-paid 2-1 buydown versus a price reduction versus you buying points. Compare the 5-year cost and the payment after the buydown ends.
- Stress-test your budget at the full note rate. Make sure year-three payments fit without a refinance.
- Coordinate with your agent and lender so the contract, Closing Disclosure, and buydown escrow are aligned.
If you are selling
- If you need to hold price but attract buyers, quote the exact dollar cost of a 2-1 buydown on your listing or in negotiations. The concrete monthly savings helps buyers visualize the value.
- Confirm the buyer’s loan program allows the buydown and that your contribution fits concession caps.
- Market the offer clearly so it stands out among comparable listings.
Your next step
If a buydown is on your mind, run the numbers side by side with current lender quotes and your timeline. Then choose the structure that gets you to a payment you can live with today and later.
Ready to pressure-test your options in White Plains or nearby Westchester suburbs? Reach out to Elana Zimmerman for a clear plan that fits your purchase or sale.
FAQs
What is the difference between permanent and temporary buydowns?
- A permanent buydown uses discount points to lower your rate for the life of the loan, while a temporary buydown lowers the effective payment for 1 to 3 years, then the payment resets to the note rate.
How much does a 2-1 buydown typically cost in White Plains?
- On a loan near $600,000, a 2-1 buydown often lands in the low to mid five figures because it equals the sum of the first two years’ monthly payment differences.
Are discount points tax deductible for homebuyers?
- Discount points may be deductible as mortgage interest if IRS rules are met, and seller-paid points may be treated as paid by the buyer, so ask a tax professional and review IRS guidance on points.
Do seller-paid buydowns count toward concession limits?
- Yes, buydowns funded by the seller are usually treated as concessions and must fit the loan program’s cap, which varies by down payment and program.
What happens after a temporary buydown ends if I cannot refinance?
- Your payment increases to the full note rate, so you should budget for that higher amount from day one and only accept a buydown if that future payment is affordable.
