Part 2: How to Lower Your Mortgage Payment in 2026 — Seller Credits, 2-1 Buydowns and Points, Explained
Jesse J. Rivas, REALTOR® | Keller Williams Central Valley | Updated October 6, 2026
Quick answer: The three most common ways to lower a mortgage payment when rates are high are (1) asking the seller for a credit toward closing costs, (2) a temporary 2-1 buydown that lowers the rate by 2% in year one and 1% in year two, and (3) paying points for a permanently lower rate. With sellers offering concessions at record levels, many buyers can have the seller pay for some or all of these.
Our example home
To keep things real, every example below uses the same purchase: a $525,000 home (close to the San Joaquin County median), 5% down, a $498,750 loan, and a 7.25% 30-year fixed rate. Figures are principal and interest only.
Step 1: Ask for a seller credit toward closing costs
A seller credit is money the seller agrees to put toward your closing costs. Instead of asking for $15,000 off the price, you might ask for a $15,000 credit. A price cut of that size lowers the payment by only about $100 a month, while a credit can cover real costs at closing or pay for a buydown.
Every loan type limits how much a seller can contribute, often between 3% and 9% of the price depending on the program and your down payment. Your lender will confirm your limit before you write the offer.
Step 2: Consider a temporary 2-1 buydown
With a 2-1 buydown, money is set aside at closing to reduce your rate for the first two years. You still qualify at the full rate.
| Year | Effective rate | Monthly P&I | Savings vs. 7.25% |
| Year 1 | 5.25% | $2,754 | $648/mo |
| Year 2 | 6.25% | $3,071 | $331/mo |
| Years 3–30 | 7.25% | $3,402 | — |
The total cost of this buydown is about $11,756 — roughly 2.2% of the price. A 3% seller credit on this home ($15,750) could pay for it and still leave money for other closing costs.
- Good fit: buyers expecting raises, a second income, or who want breathing room in the first two years.
- Not a fit: anyone who can only afford the year-one payment. Year three always arrives.
Step 3: Compare a permanent buydown (paying points)
A point equals 1% of your loan amount. Paying points lowers your rate for the life of the loan. Pricing changes daily and differs by lender.
Example: if one point ($4,988) lowers the rate from 7.25% to 7.00%, the payment drops from $3,402 to $3,318 — about $84 a month. It takes about 59 months (five years) to break even. If you sell or refinance before then, you may not recover the cost.
Step 4: Shop loans and lenders
- Compare FHA, VA and conventional options — they price differently depending on your credit and down payment.
- Ask about down payment assistance programs you may qualify for.
- Get quotes from more than one lender, and compare the Loan Estimates line by line.
Which option is right for you?
| If your priority is… | Consider | Why |
| Less cash at closing | Seller credit | Covers fees you’d otherwise pay out of pocket |
| Lower payment early on | 2-1 buydown | Biggest savings in the first two years |
| Lower payment for decades | Points | Savings last the life of the loan if you keep it |
| Flexibility to refinance | Seller credit or 2-1 | Points pay off only if you keep the loan for years |
Frequently asked questions
If I refinance during a 2-1 buydown, do I lose the leftover money?
Under many programs, unused buydown funds are applied to your loan balance at payoff, but rules vary. Ask your lender how unused funds are handled before you choose.
Can I combine a seller credit and a buydown?
Yes — a seller credit is often the money that pays for the buydown. The total still has to stay within your loan’s seller-contribution limit.
Want real numbers on your situation? Call or text Jesse at (510) 506-3800 or email JesseRivas@KW.com. No pressure — just the information you need to decide.
About the author: Jesse J. Rivas is a REALTOR® with Keller Williams Central Valley (DRE #02282782) serving Lodi, Stockton, Manteca, Modesto and San Joaquin County. He has bought and sold homes himself and works with first-time buyers, move-up buyers, sellers, and homeowners facing financial hardship.
Buying in 2026 series: Part 1 — Buying When Rates Are Above 7% • Part 2 — How to Lower Your Mortgage Payment • Part 3 — Marry the House, Date the Rate
Sources: Freddie Mac PMMS (Oct 1, 2026); Redfin seller concession data (2026). Payment examples are illustrations only, not a loan offer, rate quote, or financial advice. Jesse Rivas is not a lender or financial advisor. Confirm rates, program eligibility and seller-contribution limits with a licensed mortgage professional.
