With rates hovering near 6.5%, buying down your rate could save tens of thousands over the life of your loan. Here's how to do the math — and how to fund it with money that would otherwise go to agent commissions.
A mortgage rate buydown lets you pay a lump sum at closing — called discount points — in exchange for a permanently lower interest rate. Each point costs 1% of your loan amount and typically reduces your rate by about 0.25%.
Think of it as prepaying interest: you spend more upfront to save more every single month for the rest of your mortgage. In a high-rate environment like 2026, the math can work dramatically in your favor.
Here's what a buydown looks like on common 2026 home prices, assuming a 30-year fixed mortgage with 20% down:
| Home Price | Loan Amount | 1 Point Cost | Rate Reduction | Monthly Savings | Break-Even |
|---|---|---|---|---|---|
| $500,000 | $400,000 | $4,000 | 6.50% → 6.25% | ~$67/mo | ~60 months |
| $750,000 | $600,000 | $6,000 | 6.50% → 6.25% | ~$100/mo | ~60 months |
| $1,000,000 | $800,000 | $8,000 | 6.50% → 6.25% | ~$134/mo | ~60 months |
| $1,500,000 | $1,200,000 | $12,000 | 6.50% → 6.25% | ~$201/mo | ~60 months |
| $2,000,000 | $1,600,000 | $16,000 | 6.50% → 6.25% | ~$268/mo | ~60 months |
After the break-even point (roughly 5 years), every month of savings is pure money in your pocket. Over 30 years on a $1M home, that one point saves you over $48,000 in total interest.
Here's where it gets interesting. With a traditional buyer's agent taking 2.5% commission, that money disappears into your agent's pocket. With ShopProp's flat $4,495 buyer fee, the difference comes back to you as a rebate at closing — and it can go directly toward discount points.
| Home Price | 2.5% Agent Commission | ShopProp Flat Fee | Your Rebate | Points Funded | Rate Reduction |
|---|---|---|---|---|---|
| $600,000 | $15,000 | $4,495 | $10,505 | ~2.2 points | ~0.55% |
| $800,000 | $20,000 | $4,495 | $15,505 | ~2.4 points | ~0.60% |
| $1,000,000 | $25,000 | $4,495 | $20,505 | ~2.6 points | ~0.65% |
| $1,500,000 | $37,500 | $4,495 | $33,005 | ~2.8 points | ~0.70% |
| $2,500,000 | $62,500 | $4,495 | $58,005 | ~2.9 points | ~0.73% |
Instead of paying a percentage-based agent and getting nothing back, you pay a flat fee, get the same managing-broker-reviewed service, and use the rebate to permanently lower your mortgage rate. The savings compound for decades.
See exactly how much you'd get back at closing — and what it could do to your monthly payment.
Calculate Your Savings Get StartedIn 2026's rate environment, permanent buydowns make more sense if you're planning to stay in the home for at least 5 years. If you expect rates to drop significantly and plan to refinance within 2-3 years, a temporary buydown (or no buydown at all) may be smarter.
Too many buyers purchase points without knowing how long it takes to recoup the cost. If you buy $8,000 in points but sell the home in 3 years, you've lost money. Always calculate: point cost ÷ monthly savings = break-even months.
If rates drop significantly in 2027 or 2028, you may refinance — making your purchased points worthless. Consider the macro rate outlook before committing to a permanent buydown.
With a flat-fee buyer agent like ShopProp, your rebate can fund the entire buydown. Paying a 2.5% commission agent AND buying points out of pocket means you're spending twice where you could spend zero.
There's a point of diminishing returns. Most lenders cap at 3-4 points, and the rate reduction per point can decrease as you add more. Usually 1-2 points offers the best value.
That $10,000 in points could also go toward a larger down payment (reducing PMI), an emergency fund, or home improvements. Compare all uses before deciding.
Most buyer agents don't have the financial background to advise on rate buydown strategy. ShopProp's managing broker — with a background in construction and finance — reviews every transaction and can help you evaluate whether points make sense for your specific situation, timeline, and financial goals.
This isn't generic advice from a script. It's a licensed managing broker with 4,000+ transaction closings who understands the interplay between purchase price, loan structure, rate strategy, and your net cost of homeownership.
Calculate how much your buyer rebate could lower your monthly payment — with no extra cost out of pocket.
Calculate Your Savings Get Started Chat with Our AIGenerally, yes. Points paid on a purchase mortgage are typically deductible in the year you buy. Points on a refinance are deducted over the life of the loan. Always consult your tax professional for your specific situation.
Yes. Seller concessions can be used toward discount points. This is a common negotiation tool, especially in buyer's markets. Your managing broker can help structure this in your offer.
Get quotes from at least 3 lenders and compare the rate reduction per point. Not all lenders price points the same way. A 0.25% reduction per point is typical, but some offer better or worse pricing.