buydown

noun

buy·down ˈbī-ˌdau̇n

variants or less commonly buy-down

plural buydowns also buy-downs

: any of various mortgage financing techniques in which an extra sum is paid to the lender up front in exchange for a lower interest rate for a set number of years or for the term of the loan

When first-time buyers Rachel Shatto and Randy Nelson purchased a home in Oakland in May, they negotiated an interest rate buydown that effectively lowered their mortgage rate, and thus their monthly payment, for the first two years.—

Kathleen Pender

Though a majority of buydowns are negotiated between buyers and lenders, sellers and builders also can offer the concession to attract buyers without reducing the listing price.—

Bailey Schulz