What is Buying Down Rate?

The lender provides a rate to the mortgage broker or agent, for example¬† 2.69% for 5 year fixed. The mortgage broker or agent wants to sell 2.59% to the clients. The lender will never pay any extra¬†cost. So the lender will deduct the interest difference between 2.69% and 2.59% from the commission the lender will pay to the mortgage broker or agent. This 2.59% rate is called “Buying Down Rate”.

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