In today's housing market, more sellers are choosing to reduce their asking prices, especially when their homes have been on the market for a while without receiving offers. According to HousingWire, 43% of sellers are making price cuts, the highest share in four years.
But lowering your asking price isn't your only option. Another strategy worth considering is a mortgage rate buydown, which could make a meaningful difference in a buyer's monthly payment without requiring you to reduce the price of your home.
Today's buyers have more negotiating power. In September 2026, Redfin reported that there were 63% more sellers than buyers in the market. With more homes to choose from, buyers have greater flexibility when negotiating.
Mortgage rates are also putting pressure on their budgets, making monthly affordability a major concern. That's why many buyers focus on getting a lower purchase price.
However, reducing your asking price isn't necessarily the only way to meet their needs. Some sellers are discovering that offering to help lower a buyer's mortgage rate can be just as appealing, or even more valuable, depending on the buyer's priorities.
A rate buydown is an amount paid at closing to reduce the buyer's mortgage interest rate. When the seller covers this cost, they're essentially paying part of the buyer's interest upfront, helping lower the monthly payment.
There are two common types:
Temporary buydown: Reduces the interest rate during the first few years of the loan before it returns to the original rate. The longer the reduced-rate period, the more it generally costs. This may work well for buyers who expect to refinance within a specific timeframe.
Permanent buydown: Lowers the interest rate for the entire loan through discount points. Each point costs 1% of the loan amount and, according to FICO, typically reduces the rate by approximately 0.25 percentage points. This option may benefit buyers planning to stay in their home for many years.
The right choice depends on the buyer's plans, the loan terms, and how much the seller is willing to contribute.
Imagine you're willing to offer a $10,000 concession to help close the deal. You could use that money to reduce the home's purchase price or contribute toward a mortgage rate buydown.
For a buyer financing a $420,000 home with a 30-year fixed mortgage at 7%, these options can produce very different results. A temporary 2-1 buydown, for example, can generate substantially greater monthly savings during the first year than a price reduction of the same amount.
That's important because many buyers make decisions based on their monthly payment, not just the purchase price. A lower payment at the beginning of the loan could make your property more attractive without reducing its advertised price.
Before choosing, work with your real estate agent and the buyer's lender to compare the available scenarios. Keep in mind that loan programs limit how much sellers can contribute toward a buyer's costs. A buydown also doesn't prevent buyers from requesting repairs or other concessions, so it's important to understand the full terms of an offer.
As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains, sellers need to consider local market conditions and may need to offer price reductions or other incentives to attract buyers.
Bottom Line
Making your home more attractive doesn't always mean lowering its asking price. A mortgage rate buydown could help buyers save more on their monthly payments, particularly during the first years of their loan, while allowing you to preserve more of your home's value.
📍 Thinking about selling your home? Contact Lake Michigan Realty. We'll help you explore different strategies, compare potential incentives, and find an approach that makes sense for your property and today's market.
