What Is a 1-0 Buydown Mortgage?
Mortgage rates have been one of the biggest hurdles for Washington home buyers over the past few years. Many buyers are ready to purchase but are waiting for rates to drop before making a move. What many people don't realize is that there are programs available right now that can meaningfully reduce your payment during the first year of homeownership.
A 1-0 buydown is a temporary mortgage rate reduction. Your interest rate is reduced by 1% during the first 12 months of the loan. After that, the rate returns to the standard fixed rate locked at closing — and stays there for the rest of the term. No surprises, no adjustable rate, no catch.
The standout feature of Rocket Mortgage's program is that the lender pays the cost of the buydown. You receive a lower first-year payment without paying extra at closing. Restrictions apply and eligibility varies, but for many buyers this represents a significant first-year advantage.
Get Pre-Approved
Todd reviews your situation and confirms 1-0 buydown eligibility alongside your other loan options.
Lock Your Rate
Your standard fixed rate is locked. Rocket Mortgage funds the buydown — it doesn't come out of your pocket.
Year 1 — Reduced Payment
Your rate runs 1% below the locked rate for the entire first year. You keep the difference every month.
Month 13 Forward — Standard Rate
The loan simply returns to your fixed rate. Nothing changes about the loan structure — it remains a traditional fixed-rate mortgage for the rest of the term.
Year 1 Savings Calculator
Enter your home purchase details to see what the 1-0 buydown could save you in your first year. These are principal + interest estimates — your actual payment will also include taxes and insurance.
Calculate Your First-Year Savings
Adjust the fields below to match your target purchase.
Estimate only. These figures reflect principal and interest only. Your actual monthly payment will include property taxes, homeowner's insurance, and possibly PMI depending on your down payment. Rates shown are illustrative — contact Todd for current qualifying rates.
Want to see this scenario for your specific purchase?
Todd can run a full payment breakdown in minutes — no obligation.Who Benefits Most from a 1-0 Buydown?
The lender-paid 1-0 buydown is especially well-suited to buyers who want to ease into their monthly payment during the first year — when moving costs, home improvements, and new expenses tend to pile up.
First-Time Home Buyers
The transition from renting to owning comes with a lot of new expenses. A lower Year 1 payment provides a real financial buffer.
Buyers Relocating to Oregon
Moving across the country is expensive. A reduced first-year payment means more cash available for the relocation transition.
Buyers at Higher Price Points
The savings scale with loan size — on a $700K purchase the monthly difference can be substantial.
Buyers Planning Improvements
If you're planning renovations or updates in that first year, the monthly savings can go directly toward those projects.
Move-Up Buyers
Stepping up to a larger home often means a larger payment. The buydown smooths that transition in the first year.
Anyone Wanting Rate Relief Now
If today's rates feel like a stretch, the 1-0 buydown gives you an immediate 1% reduction without waiting for the market.
Not sure if you qualify?
Let Todd review your situation — takes about 15 minutes.What Happens After Year 1?
After the first 12 months, the loan simply returns to the fixed rate that was locked when your mortgage was originated. Nothing else about the loan changes.
- Your rate returns to the agreed-upon fixed rate — not an adjustable rate, not a new rate
- The loan term and all other terms remain exactly as originally set
- No paperwork, no refinance, no action required from you
- The transition is automatic on month 13
This is not an ARM or adjustable-rate mortgage. Your rate in Year 2 is exactly what you agreed to when you locked — the same rate the lender used to calculate your long-term payment. You went in knowing the full picture.
Many buyers use the first-year savings strategically: building an emergency fund, paying down moving expenses, or making targeted improvements to the home. It's a straightforward program — a one-year head start with no hidden costs or long-term trade-offs.
Want the Full Picture for Your Purchase?
Todd can run a side-by-side showing your Year 1 and Year 2+ payments, total 12-month savings, and how the buydown compares to other available programs.
1-0 Buydown FAQs
What exactly is a 1-0 buydown?
A 1-0 buydown temporarily reduces your mortgage interest rate by 1% during the first year of the loan. After 12 months, the rate returns to the original fixed rate you locked at closing and stays there for the remainder of the loan term. The "1-0" refers to the reduction: 1% in year one, 0% reduction in year two and beyond (standard rate).
Why is this called "lender-paid" — who really covers the cost?
Rocket Mortgage funds the cost of the rate reduction for eligible buyers. In other buydown programs, buyers or sellers typically pay the cost upfront to cover the difference between the reduced and standard rate during the buydown period. With this program, that cost is covered by Rocket Mortgage — not added to your closing costs or loan balance. Restrictions and eligibility requirements apply.
Does this affect my long-term rate?
No. Your long-term rate is the standard fixed rate you locked when originating the loan. The 1% reduction only applies to Year 1. From month 13 forward, your rate is exactly what you agreed to — no higher, no lower. This is a traditional fixed-rate mortgage with a temporary first-year benefit, not an adjustable-rate product.
Is this available on all loan types in Oregon?
The program is available on conforming conventional purchase loans within conforming loan limits. It cannot be combined with all other discounts or programs. Todd can quickly confirm whether your specific loan scenario — purchase price, loan type, down payment — qualifies during a pre-approval conversation.
What are typical Washington homes prices and how much could I save?
Oregon home prices vary significantly by region. Washington home prices vary by region. King County/Seattle-area homes typically range from $450,000 to $700,000; the coast, Olympic Peninsula, and Eastern Washington run from $350,000 to $600,000; Spokane and Eastern Washington have more affordable options with medians around $280,000–$400,000. Use the calculator above to run your specific target price and current rate for an accurate first-year savings estimate.
Can I refinance later if rates drop?
Yes — this is a standard fixed-rate mortgage and can be refinanced at any time subject to normal qualification requirements. Many buyers use this program with the intention of refinancing once rates improve. The 1-0 buydown makes the first year more manageable regardless of what happens with future rate movements.
How do I find out if I qualify?
The fastest way is a quick conversation with Todd — you can schedule a 15-minute call or reach out directly by phone or email. He'll review your purchase price target, credit, income, and down payment to confirm eligibility and run a complete payment scenario including Year 1 and Year 2+ side-by-side.
Ready to Run Your Numbers?
Email or call and I can put together a 1-0 buydown scenario specific to your target home price — showing your Year 1 payment, Year 2+ payment, and total first-year savings. Takes about 15 minutes.
Todd Davidson
Executive Loan Officer – Rocket Mortgage
NMLS #2003696 | Serving Washington Oregon & Washington Oregon
✉️ todddavidson@rocketmortgage.com
25030 SW Parkway Ave Suite #230 · Wilsonville, OR 97070
Disclosures: Offer valid only on retail loans with conforming loan limits and cannot be combined with any other discounts. Interest rate is reduced by 1% for the first year of the loan, after which the rate returns to the original fixed rate for the remainder of the loan term. Rocket Mortgage reserves the right to cancel or modify this offer at any time. This is not a commitment to lend. Additional restrictions and conditions apply. Rocket Mortgage, LLC; NMLS #3030. www.nmlsconsumeraccess.org. Equal Housing Lender. Licensed in 50 states.