Answers by Amy Reiland

A 2-1 buydown makes your payment a lot cheaper in years 1 and 2, then in year 3 it jumps to the full rate you locked, and it stays there unless you refinance. It’s usually better than a small price reduction if you care most about payment relief in the first few years and you’re reasonably likely to refinance or move within about 3–5 years. A price reduction is better if you expect to keep this mortgage long term (7–10+ years) and want lower principal, less total interest, and a permanently lower payment. Whichever you choose, you still must be able to qualify for and truly afford the full year‑3 payment, because that’s your real “forever” obligation. So: short‑term focus or likely refi = 2‑1 buydown; long‑term stay and conservative mindset = push for price reduction instead.