What Is a Free 1-0 Buydown and Why Smart Homebuyers Are Using It Right Now
Buying a home in today's market means navigating elevated interest rates while managing a mountain of new expenses. What if you could get a full 1% off your mortgage rate for the entire first year — at no cost to you?
That's exactly what the Free 1-0 Buydown offers. And right now, it's one of the most powerful tools available to homebuyers.
What Is a 1-0 Buydown?
A 1-0 buydown temporarily reduces your mortgage interest rate by 1% for the first 12 months of your loan. After that, your rate returns to the standard note rate for the remainder of the term.
The "1-0" refers to the structure: 1% lower in Year 1, 0% reduction in Year 2 and beyond. It's simple, effective, and — in this program — completely free to the borrower.
How Is This Free?
Normally, a buydown is paid for by the seller, builder, or borrower as a lump sum at closing. With this exclusive program through the nation's largest wholesale lender, the cost of the buydown is covered for you. No extra fees. No points. No tricks.
This offer is not available at banks or retail lenders — it's exclusive to mortgage brokers who work with this wholesale lender. That also means you get access to the lowest mortgage insurance rates available if your down payment is under 20%.
A Real Example: See the Savings
Here's how the 1-0 buydown works on an $800,000 purchase loan (30-year fixed):
| Standard Rate | 1-0 Buydown | |
|---|---|---|
| Year 1 Rate | 6.125% | 5.125% |
| Year 1 Monthly Payment | $4,861 | $4,356 |
| Monthly Savings | — | $505/month |
| Total Year 1 Savings | — | $6,060 |
| Year 2+ Rate | 6.125% | 6.125% |
| Closing Fees | $0 | $0 |
That's $505 back in your pocket every month for the first year — right when moving costs, furniture, and home repairs hit hardest.
The Smart Play: Refinance Before Month 13
The buydown is designed as a strategic bridge to a lower rate. Here's the game plan:
- Months 1–12: You enjoy the reduced 5.125% rate and pocket $6,060 in savings.
- Before Month 13: If rates drop, you refinance — at no origination cost. You keep all your Year 1 savings and step into a better rate.
- Month 13 (Break-Even): Through this point, your total payments equal what you would have paid on a standard loan. You're never behind.
Even if you don't refinance until after Month 13, you've already banked $6,060. The worst case is you start paying your original note rate — the same rate you would have had from day one anyway.
What Happens After 12 Months?
You have two options:
- Refinance — if rates have improved, you can refinance into a lower rate with no origination fees. This is the goal.
- Continue at the note rate — if rates haven't moved, your payment simply adjusts to the standard 6.125%. No penalty, no surprise.
Who Qualifies?
This program is available to qualified borrowers on:
- Conventional loans — with as little as 3% down
- FHA loans — with as little as 3.5% down
- VA loans — no mortgage insurance required
- USDA loans
You don't need a large down payment to take advantage. And if your down payment is under 20%, this program also comes with access to the lowest mortgage insurance rates available — another exclusive benefit of working with a wholesale mortgage broker.
Is This Right for You?
The 1-0 buydown is a great fit if:
- You want lower payments in Year 1 while you settle into homeownership
- You expect to refinance within the next 1–3 years as rates improve
- You want a cash flow cushion for moving costs, repairs, or savings
It's less ideal if you plan to hold the loan for the full 30 years without ever refinancing. In that scenario, a standard locked rate may be simpler. But given that the average mortgage is refinanced or paid off within just a few years, most buyers are well-positioned to benefit.
Act Fast — This Offer Expires June 30, 2026
The Free 1-0 Buydown is available on purchase loans closed by June 30, 2026. If you're thinking about buying this summer, now is the time to move.
Getting pre-qualified takes just a few minutes and comes with no obligation. You'll know exactly where you stand — and whether this program is the right fit for your home purchase.
Ready to explore your options? Reach out to find out if you qualify and how much you could save in Year 1.
This document is for illustrative purposes only and is not a commitment to lend. Loan terms, rates, payments, and costs are estimates based on the assumptions shown and may vary based on market conditions, borrower eligibility, and underwriting approval. Payments reflect principal and interest only and exclude taxes, insurance, mortgage insurance, HOA dues, and other costs. Any savings, payment differences, break-even timing, or refinance scenarios are hypothetical, not guaranteed, and depend on future market conditions and borrower qualification. There is no guarantee as to the accuracy or completeness of this information and liability is disclaimed to the fullest extent permitted by law. This is not financial, legal, or tax advice. Loan terms, conditions, and interest rates may vary based on creditworthiness and market conditions. Consult with your lender for full terms, disclosures, and repayment details. Buckingham Mortgage LLC | NMLS# 1124970 | 8270 Greensboro Drive, Suite 725, McLean, VA 22102 | Equal Housing Lender. Sasha Mrak Hendrickson, MBA | Mortgage Loan Originator & Team Lead | NMLS: 2574246.
