--- title: Interest Rate Buydown Mortgage Loans in Texas | Reduced Starting Rate --- [Skip to the main content.](https://texasmortgagelending.com/home-loans/interest-rate-buydown#main-content) [![TML_Logo_Powered_By_CUTX-2026](https://texasmortgagelending.com/hs-fs/hubfs/TML_Logo_Powered_By_CUTX-2026.png?width=1048&height=400&name=TML_Logo_Powered_By_CUTX-2026.png "TML_Logo_Powered_By_CUTX-2026")](https://texasmortgagelending.com/?hsLang=en) [![3.26.2026 TML Powered by CUTX concept V1](https://texasmortgagelending.com/hs-fs/hubfs/3.26.2026%20TML%20Powered%20by%20CUTX%20concept%20V1.webp?width=400&height=101&name=3.26.2026%20TML%20Powered%20by%20CUTX%20concept%20V1.webp "3.26.2026 TML Powered by CUTX concept V1")](https://texasmortgagelending.com/?hsLang=en) - [Jumbo Mortgage](https://texasmortgagelending.com/home-loans/jumbo) Search Toggle Menu Search Toggle Menu - [Jumbo Mortgage](https://texasmortgagelending.com/home-loans/jumbo) - Popular Mortgage Types - [Jumbo Mortgage](https://texasmortgagelending.com/home-loans/jumbo) - [15, 20, and 30-Year](https://texasmortgagelending.com/home-loans/15-20-30-year) - [40-Year Mortgage](https://texasmortgagelending.com/home-loans/40-year) - Government-Backed Loans - [FHA Mortgage](https://texasmortgagelending.com/home-loans/fha-financing) - [VA Mortgage](https://texasmortgagelending.com/home-loans/veterans-va) - [USDA Mortgatge](https://texasmortgagelending.com/home-loans/usda-rural-development) - Specialty Programs - [Adjustable-Rate Mortgage](https://texasmortgagelending.com/home-loans/arm-adjustable-rate) - [Interest-Only (First 5 Years)](https://texasmortgagelending.com/home-loans/interest-only) - [No PMI](https://texasmortgagelending.com/home-loans/no-pmi-lender) - [Rate Buydown](https://texasmortgagelending.com/home-loans/interest-rate-buydown) - [Zero Down Payment](https://texasmortgagelending.com/home-loans/zero-down-payment) [Facebook](https://texasmortgagelending.com/home-loans/interest-rate-buydown#0) [Instagram](https://texasmortgagelending.com/home-loans/interest-rate-buydown#0) [Linkedin](https://texasmortgagelending.com/home-loans/interest-rate-buydown#0) [X](https://texasmortgagelending.com/home-loans/interest-rate-buydown#0) [YouTube](https://texasmortgagelending.com/home-loans/interest-rate-buydown#0) [Medium](https://texasmortgagelending.com/home-loans/interest-rate-buydown#0) # Texas Interest Rate Buydown Mortgage Loans Lower your mortgage payment at the beginning of your loan with a temporary buydown designed for Texas homebuyers. This program can reduce your rate for the early years of your mortgage while keeping your long-term financing on a fixed-rate conventional loan. Our 1-0 buydown lowers the rate by 1%[1](https://texasmortgagelending.com/home-loans/interest-rate-buydown#rate_but_down_disclosure) for the first year, helping create more room in your budget during the transition into homeownership.   ## Get 1% Off Your Mortgage Rate for the First Year with a 1-0 Buydown A lower first-year payment can give you more breathing room for moving costs, repairs, furniture, or building savings after closing. ![A young girl and her parents are happily carrying moving boxes into a home](https://texasmortgagelending.com/hs-fs/hubfs/family_moving_in.webp?width=1000&height=900&name=family_moving_in.webp) ## Texas Interest Rate Buydown Mortgage Requirements and Features A Texas buydown mortgage can lower your payment at the beginning of the loan term, but the structure of the program matters. Review how the 1-0 buydown works, what loan types are eligible, how qualification is measured, and where temporary buydown funds may come from. - 1-0 Buydown Lowers the Rate by 1% for the First Year Our Interest Rate Buydown Mortgage uses a 1-0 buydown structure. During the first year of the mortgage, the principal and interest payment is based on a rate that is 1% below the note rate. After that first year, the payment returns to the permanent note rate for the rest of the term. - Other Temporary Buydown Options May Be Available Temporary buydown structures usually last between one and three years. In addition to the 1-0 buydown, some borrowers may qualify for 2-1 or 3-2-1 buydowns. With these, the interest rate starts lower and gradually increases to the permanent rate. - Buydown Funds Are Applied Through a Custodial Escrow Account A buydown escrow account covers the gap between your temporarily reduced payment and the full payment. Depending on the program, the money for this account can come from a lender credit, the seller, a real estate agent, the borrower, or a combination of these sources. - Available on Eligible Fixed-Rate Conventional Purchase Loans Interest Rate Buydown Mortgages apply to eligible fixed-rate conventional purchase money loans for primary residences and second homes that are available through Fannie Mae and Freddie Mac. - Not Available on Refinance, Jumbo, Government, ARM, or Investment Property Loans This program does not apply to refinance loans, portfolio programs such as jumbo loans, the No PMI Programs, or ARM products. It is also not offered for home equity, second liens, investment properties, FHA, or VA loans. - Qualification Is Based on the Permanent Note Rate Lenders use the permanent interest rate, not the temporary discounted rate, to decide if you qualify. This makes sure your payments will still be manageable once the buydown period is over and the loan returns to its regular rate. - Remaining Buydown Funds May Reduce Your Balance if You Refinance Early If mortgage rates go down and you refinance before your temporary buydown period is over, any leftover buydown funds will be used to reduce your loan balance. ## When a Texas Buydown Mortgage May Make Sense A temporary buydown can help if your first year of homeownership comes with extra costs besides your mortgage. It lowers your payments at first, then moves up to the regular fixed rate later on. - **You want extra room in your budget after closing** Lower payments in the first year can make it easier to cover moving costs, repairs, new furniture, appliances, or other early home expenses. - **You are buying a primary residence or second home with conventional financing** This program is designed for eligible fixed-rate conventional purchase loans, not for refinancing or government-backed loans. - **You want a lower starting payment but can still qualify for the full payment later** Since you qualify based on the regular payment with the permanent loan rate, this option works well if you want lower payments at first but can handle the full amount later. - **You want future refinance flexibility if rates improve** A temporary buydown gives you savings early on and lets you refinance later if rates get better. ![A happy couple sits amongst their moving boxes, smiling and looking over notes on a laptop and a clipboard](https://texasmortgagelending.com/hs-fs/hubfs/couple_reviewing_notes.webp?width=1000&height=900&name=couple_reviewing_notes.webp) #### Lower Payments in Year One A 1-0 buydown lowers the rate by 1% in year one, giving you a lower starting payment as you settle into your new home. [Talk With a Mortgage Specialist](https://texasmortgagelending.com/home-loans/interest-rate-buydown#lead-form) ![grey-card](https://texasmortgagelending.com/hubfs/grey-card.webp) #### Built for Early Homeownership Costs A buydown can help free up cash flow for repairs, appliances, furniture, and expenses that often show up right after closing. [We're Here to Help](https://texasmortgagelending.com/home-loans/interest-rate-buydown#lead-form) ![grey-card](https://texasmortgagelending.com/hubfs/grey-card.webp) #### Conventional Purchase Loans for Primary and Second Homes A buydown is vailable on eligible fixed-rate conventional purchase loans for primary residences and second homes. [Talk With a Mortgage Specialist](https://texasmortgagelending.com/home-loans/interest-rate-buydown#lead-form) ![grey-card](https://texasmortgagelending.com/hubfs/grey-card.webp) #### Qualification Uses the Full Note Rate Qualify based on the permanent, not the temporarily reduced, loan rate, ensuring the loan still fits after the buydown period ends. [Lets Crunch The Numbers](https://texasmortgagelending.com/home-loans/interest-rate-buydown#lead-form) ![grey-card](https://texasmortgagelending.com/hubfs/grey-card.webp) #### Multiple Temporary Buydown Structures Beyond 1-0 buydowns, some borrowers also compare 2-1 and 3-2-1 buydowns, depending on how the funds are arranged. [See if it Fits](https://texasmortgagelending.com/home-loans/interest-rate-buydown#lead-form) ![grey-card](https://texasmortgagelending.com/hubfs/grey-card.webp) #### Refinance Flexibility Later If rates drop before the buydown term ends, remaining buydown funds may be applied to your refinanced loan balance. [Get Started](https://texasmortgagelending.com/home-loans/interest-rate-buydown#lead-form) ![grey-card](https://texasmortgagelending.com/hubfs/grey-card.webp) ![TML_Red_Logo](https://texasmortgagelending.com/hubfs/TML_Red_Logo.png) ![CUTX Logo_CUTX Horizontal_Slim](https://texasmortgagelending.com/hs-fs/hubfs/CUTX%20Logo_CUTX%20Horizontal_Slim.png?width=444&height=115&name=CUTX%20Logo_CUTX%20Horizontal_Slim.png) ![Equal-Housing-Opportunity-Logo](https://texasmortgagelending.com/hs-fs/hubfs/Equal-Housing-Opportunity-Logo.png?width=140&height=150&name=Equal-Housing-Opportunity-Logo.png) ## Let's discuss your Interest Rate Buydown options *NMLS #576560 Credit Union of Texas provides mortgage loans through its affiliate Texas Mortgage Lending, LLC, NMLS #1641703. CUTX home loan programs are only available in Texas. Loans are subject to credit approval, CUTX’s lending policies, and property approval. Traditional closing costs apply. Additional terms and conditions may apply. Prequalification is not a commitment to lend. Membership required.*   *1* *Advertised program is valid as of November 1, 2022 and subject to change without notice. The Interest Rate Buydown Mortgage offer will effectively reduce the interest rate by 1% for the first year of the mortgage. A custodial escrow account will be funded by the lender-paid credit, up to a maximum amount of $6,500, and funds will be dispersed from the escrow account towards each monthly payment to account for the difference in interest during buydown period. Offer valid on fixed-rate conventional purchase money loans for primary residences and second homes eligible through Fannie Mae and Freddie Mac. Offer not valid on Refinance loans or CUTX portfolio programs (Jumbo, Fast Lane Mortgage, 95% No PMI Program), Home Equity, Second Liens, Investment Property, FHA, VA or ARM products, and cannot be combined with any other discounts or promotions. Offer may not be redeemed for cash or credit and is nontransferable. Offer cannot be retroactively applied to any previously closed loans or loans already in process and is subject to changes or cancellation at any time at the sole discretion of CUTX. Additional restrictions/conditions may apply. Member must lock initial rate between 30 and 90 days from the purchase closing date. This is not a commitment to lend and is contingent on qualification per full underwriting guidelines.* Title Goes Here Title Goes Here - Example - Example - Example Title Goes Here Title Goes Here - Example - Example - Example Title Goes Here Title Goes Here - Example - Example - Example Title Goes Here Title Goes Here - Example - Example [![TML_Logo_Powered_By_CUTX-2026](https://texasmortgagelending.com/hubfs/TML_Logo_Powered_By_CUTX-2026.png)](https://www.TexasMortgageLending.com) © 2026 Texas Mortgage Lending, Inc. Facebook X Instagram Linkedin YouTube Medium Return to top