09/22/2026
🌵 Squaw Peak Realty | Buyer Education Spotlight
Permanent vs. Temporary Buydowns — What’s the Real Difference?
In today’s Arizona market, buyers are hearing a lot about buydowns — but not all buydowns work the same. Here’s a simple breakdown to help you feel confident and empowered during your home purchase.
Permanent Buydown (Discount Points)
A permanent buydown lowers your interest rate for the entire 30‑year loan.
đź’° Cost: Usually 1% of the loan amount per point
📉 Rate Reduction: About 0.25% per point
⏳ Best For: Buyers planning to stay long‑term
🌟 Benefit: Larger lifetime savings and predictable payments
🔹 Temporary Buydown (2‑1 or 3‑2‑1)
A temporary buydown lowers your rate for the first 1–3 years only.
💰 Cost: Typically $3,000–$8,000 (often paid by the seller!)
📉 Rate Reduction: 1–3% depending on the structure
⏳ Best For: Buyers planning to refinance or move within a few years
🌟 Benefit: Lower initial payments and easier qualification
Quick Comparison
Feature Temporary Buydown Permanent Buydown
Upfront Cost Lower Higher
Who Pays? Often seller Buyer
Rate Reduction Short-term Full 30 years
Best For Short-term plans Long-term stability
🏡 Which One Fits Your Goals?
Every buyer’s situation is unique. At Squaw Peak Realty, we walk you through each option so you can make the choice that supports your budget, your timeline, and your peace of mind.
If you’d like a personalized breakdown based on your loan amount, I’m happy to help.
Send a message to learn more
