Making Your Move More Affordable: The Benefits of Buying Down Your Rate

Buying a home is a big milestone, and finding ways to make it more affordable can make the journey even more rewarding. With interest rates still a major consideration for many buyers, there are smart ways to ease the cost. One option is a mortgage rate buydown, which can lower your monthly payments right from the start and give you more breathing room in your budget.

Exploring houses for sale in Corpus Christi? Hogan Homes has select move-in ready homes with rates as low as 5.99%. When paired with a buydown option, this can lead to even more savings, giving you more flexibility in your budget for the things that matter most, like furnishing your new space, planning family getaways, or simply enjoying the comfort of your new home without financial stress.

What Buying Down Your Rate Means

Buying down your rate means paying an upfront fee, often called discount points, to reduce your mortgage interest rate. This can be done by you or, in some cases, offered by the builder as an incentive. A lower rate means smaller monthly payments, which can free up your budget for other expenses in those early years of homeownership.

There are two common types of rate buydowns:

• Temporary buydown – This lowers your interest rate for a limited time, usually during the first one to three years of your mortgage. Common options include:
  • 3-2-1 buydown – Your rate is reduced by 3% in the first year, 2% in the second, and 1% in the third before returning to the original rate.
  • 2-1 buydown – Your rate is reduced by 2% in the first year and 1% in the second year.
• Permanent buydown – Lowers your interest rate for the entire term of your loan. Typically, each discount point costs 1 % of your loan amount and reduces the rate by about 0.25 %.

Why It Matters Right Now

Hogan Homes is currently offering rates as low as 5.99 % on select inventory, and pairing that with a rate buydown can make your payments even more affordable from the start. In today’s market, where every percentage point matters, this can be a powerful way to lock in savings and give you more financial breathing room.

Here’s why this matters:

• Lower monthly payments early on – For example, with a 3-2-1 buydown on a $300,000 loan at 7%, your first-year interest rate would drop to 4%. That brings your initial monthly payment to around $1,432, instead of the standard $1,996, a savings of about $563 per month, or more than $6,700 in the first year alone.
• Increased affordability – Roughly 40% of new home sales today include rate buydowns, helping buyers manage costs despite higher interest rates.
• Builder incentives work in your favor – Across the country, more than half of production builders are using rate buydowns to help buyers secure homes without reducing the selling price.

How It Works in Practice

If you qualify for a 30-year mortgage at 6.49%, a temporary 2-1 buydown could lower your rate to 4.49% in the first year and 5.49% in the second year before returning to 6.49 % in the third year onward. Those first two years of lower payments can make settling into your new home and your new budget far less stressful.

The savings you gain early on could be used to personalize your home, build an emergency fund, or simply make day-to-day life more comfortable. And with Hogan Homes’ thoughtful features like drop zones, spacious pantries, and ideally located laundry rooms, you can enjoy a home that’s not only affordable but also designed for real-life convenience.

Points to Consider

While buying down your rate can be a smart move, it’s important to keep a few things in mind:

• Plan for payment changes – With a temporary buydown, once the reduced-interest period ends, you’ll move to the original rate, and that means your monthly payment will increase.
• Qualifying at the full rate – Even if you start with a reduced rate, lenders will still require you to qualify based on the original rate.
• Consider your timeline – Permanent buydowns are most cost-effective if you plan to stay in the home long enough to recoup the upfront cost.

Why Hogan Homes Is the Right Partner

For nearly 60 years, Hogan Homes has been deeply rooted in the South Texas community, building homes designed for families, location, and lifestyle. Our homes are built for optimal functionality so they feel elegant, organized, and ready for you to enjoy from the moment you move in. Energy-efficient appliances and durable materials add to the value, helping you save on utility costs over the years.

When you combine these long-term benefits with our current offer of rates as low as 5.99% on select inventory and the potential to buy that rate down even further, you’re getting both immediate savings and lasting value.

Get More Out of Your Home Purchase

A rate buydown isn’t just a short-term benefit; it’s a smart way to ease into homeownership by lowering your initial monthly payments and giving you a little extra breathing room as you get settled. Combined with Hogan Homes’ already competitive rates, it becomes an even more practical way to step into homeownership with more confidence.

If you’re exploring houses for sale in Corpus Christi, now is a great time to take advantage of this opportunity. Hogan Homes offers thoughtfully designed, move-in-ready homes built to last, with flexible financing options to help make your move even easier. Visit our floor plans page to find a home that fits your life and your budget.

Sources

“3-2-1 Buydown Mortgage: Meaning, Pros and Cons, FAQs” Investopedia,
https://www.investopedia.com/terms/1/3-2-1_buydown.asp
“What Are Mortgage Buy-downs?” Freedom Mortgage,
https://www.freedommortgage.com/learning-center/articles/mortgage-buydowns
“Buydown: A way to reduce interest rates,” Rocket Mortgage,
https://www.rocketmortgage.com/learn/buydown-mortgage
“Mortgage buydown: What it is and how it works,” Empower,
https://www.empower.com/the-currency/life/mortgage-buydown-what-it-and-how-it-works
“Rate buydowns, negotiations, and nepo money: Here’s how people are affording homes in today’s market,” Business Insider,
https://www.businessinsider.com/home-prices-affordability-crisis-mortgage-rate-gen-z-down-payment-2025-7

“Understanding Temporary Buydowns: How They Work and Their Benefits for Homebuyers,” Northpointe Bank, https://www.northpointe.com/learn/homes-real-estate/understanding-temporary-buydowns-how-they-work-and-their-benefits-for-homebuyers/
“Temporary Mortgage Rate Buydown Activity Spiked in Late 2022, Now Becoming Less Common,” Freddie Mac, https://www.freddiemac.com/research/insight/20230731-temporary-mortgage-rate-buydown-activity-spiked-in
“Mortgage Rate Buydown,” Wall Street Journal,
https://www.wsj.com/buyside/personal-finance/mortgage-rate-buydown-25a369c8