• A 2-1 buyout is a type of financing that lowers the mortgage interest rate for the first two years before it rises to a regular, constant rate.
  • The rate is usually two percentage points lower in the first year and one percentage point lower in the second year.
  • Sellers, including home builders, may offer 2-1 buyouts to make properties more attractive to buyers.
  • A 2-1 buyout can be a good deal for homebuyers, provided they can afford the higher monthly payments once they start.