Skip to navigationSkip to main contentADVERTISEMENTSome offers on this page are from advertisers who pay us, which may affect which products we write about, but not our recommendations. See our Advertiser Disclosure.RRachel WitkowskiE. Napoletano · ContributorTrea Branch · Contributing WriterUpdated Wed, July 22, 2026 at 4:59 PM GMT+2 11 min readMortgage rates are lower than this time last year, but they're still nowhere near the 3% range we saw in 2020 and 2021. However, there is a way to lower your mortgage costs: a buydown interest rate.With this method, you pay more at closing to lower your mortgage interest rate. While it costs more money up front, it can lead to greater savings over the life of the loan. But it's a more beneficial tactic if you plan to stay in the home for a while — the longer you keep the mortgage, the more you'll save by buying down the rate. While there are perks to having a lower mortgage rate, there are also factors to consider before buying down your interest rate.What is buying down your interest rate? When you buy down your mortgage rate, you pay extra money at closing to purchase points that essentially lower your interest rate.Different lenders have their own mortgage rate buydown programs, so there might be a slight difference in the calculation and loan terms. Be sure to ask several mortgage lenders how their buydown programs work to help you decide which loan is right for you.There are two ways to buy down your mortgage. "Discount points" refer to buying down your rate permanently, and a "mortgage buydown" does so temporarily. These two terms both refer to ways to buy down your rate and are often used interchangeably, but there are important differences.➡ Read more: