Maria Pierotti
2 months ago
I had a GREAT experience with Omar. He was able to get the loan done quickly and efficiently. I would highly recommend him.
Last reviewed: September 20, 2026
Free Buydown Tool
Temporary Buydown Calculator — 1-0, 1-1, 2-1 & 3-2-1
See exactly how much a temporary buydown lowers your monthly payment — and how much the seller or builder needs to contribute to fund it. Calculate all four buydown structures side by side.
Buydown Calculator
Example only. Assumptions: loan amount $700,000, 6.75% example note rate, 30-year fixed term, 2-1 buydown structure, 740+ credit score, 20% down payment. Figures as of October 16, 2026 and subject to change. APR is not shown and will differ from the interest rate. This is not a commitment to lend. All loans subject to lender approval.
| Year | Effective Rate | Monthly Payment | Monthly Savings | Annual Savings |
|---|---|---|---|---|
| Year 1 | 4.750% | $3,652 | $889 | $10,664 |
| Year 2 | 5.750% | $4,085 | $455 | $5,462 |
| Year 3+ | 6.750% (Note Rate) | $4,540 | — | — |
Full Rate Monthly Payment
$4,540
Year 1 Monthly Payment
$3,652
Year 1 Monthly Savings
$889/mo
Total Buydown Cost (Seller Pays)
$16,126
= Total Payment Savings ($16,126)
Cost equals savings. The total buydown cost equals your total payment savings — a temporary buydown is prepaid payment relief, not a discount. The key question is who pays: ask your seller or builder to cover the buydown cost as a concession.
Understanding the Four Buydown Structures
1-0 Buydown
Your rate is reduced by 1% for the first year only, then jumps to the full note rate in year 2. The simplest and least expensive buydown — ideal when you want modest first-year relief with a smaller seller concession. Buydown cost is roughly 1% of the loan amount.
1-1 Buydown
Your rate is reduced by 1% for the first two years, then returns to the full note rate in year 3. Provides consistent payment relief for the first two years — ideal for buyers who expect income to grow or rates to drop within two years. Cost is roughly 2% of the loan amount.
2-1 Buydown
Your rate drops by 2% in year 1 and 1% in year 2, returning to the full note rate in year 3. The most popular buydown structure in 2026 — frequently offered by sellers and builders as a purchase incentive. On a $700,000 San Diego loan, a 2-1 buydown at 6.75% note rate costs approximately $16,116 in seller concessions.
3-2-1 Buydown
Your rate drops by 3% in year 1, 2% in year 2, and 1% in year 3, returning to the full note rate in year 4. The most aggressive buydown structure — provides the largest first-year payment reduction but requires the highest seller contribution. Best suited for high-rate environments where buyers need maximum short-term relief.
Who Pays for a Temporary Buydown?
Seller-Paid (Most Common)
In most cases, the seller or builder funds the buydown as a closing cost concession. Instead of dropping the price, the seller deposits the buydown amount into an escrow account at closing. The buyer gets lower payments in the early years — and the seller avoids a permanent price reduction. This is the most common structure in San Diego's 2026 market.
Builder-Paid
Many San Diego and Southern California new-construction builders offer 2-1 buydowns as a standard incentive — pre-funding the buydown escrow from their marketing budget. Always ask your builder if a buydown is available before accepting other incentives.
Important: Borrowers must qualify based on the full note rate — not the reduced buydown rate. If you sell or refinance during the buydown period, any unused buydown funds are returned as a principal reduction — the money is not lost.
Quick Answer
What is a temporary mortgage buydown and how much does it cost?
Cascada Mortgage Advisors, Inc. (NMLS #2470941, CA DRE #02206556), founded by Omar Michel (NMLS #398944, CA DRE #02131389), is a licensed mortgage broker serving San Diego and Southern California homebuyers that arranges financing through a network of 100+ wholesale lenders — not as a direct lender. A temporary mortgage buydown reduces a borrower's effective interest rate for the first 1-3 years of a loan by depositing a lump sum subsidy into escrow at closing — typically funded by the seller or builder as a purchase concession. The four most common structures are 1-0 (rate reduced 1% for year 1), 1-1 (rate reduced 1% for years 1-2), 2-1 (rate reduced 2% in year 1 and 1% in year 2), and 3-2-1 (rate reduced 3% in year 1, 2% in year 2, and 1% in year 3). The total buydown cost equals the sum of all monthly payment savings — cost equals savings — and borrowers must qualify at the full note rate.
— Cascada Mortgage Advisors, Inc.
Temporary Buydown FAQs
A temporary mortgage buydown is a financing strategy where a lump sum — typically paid by the seller or builder — is deposited into an escrow account at closing to subsidize the borrower's monthly mortgage payments for the first 1-3 years. The note rate itself does not change. What changes is the effective payment schedule during the discounted period. After the buydown period ends, the borrower's payment returns to the full note rate. Borrowers must qualify at the full note rate, not the reduced buydown rate.
A 2-1 buydown reduces the borrower's effective rate by 2% in year 1 and 1% in year 2, returning to the full note rate in year 3. A 3-2-1 buydown extends the discount over three years — 3% below the note rate in year 1, 2% in year 2, and 1% in year 3 — returning to the full rate in year 4. The 3-2-1 provides greater early payment relief but requires a larger seller or builder concession.
The cost of a 2-1 buydown equals the total monthly payment savings across both discounted years. On a $700,000 San Diego loan at a 6.75% note rate, a 2-1 buydown costs approximately $16,116 in seller concessions — saving the buyer approximately $888/month in year 1 and $455/month in year 2. Use the free buydown calculator above to calculate the exact cost for your specific loan amount and note rate.
Yes. Seller-paid temporary buydowns are one of the most effective negotiating tools in San Diego's 2026 market. Instead of asking for a price reduction, buyers can request that the seller fund a 2-1 or 3-2-1 buydown as a closing cost concession. This gives the buyer immediate payment relief while allowing the seller to maintain their sale price. Many San Diego builders also offer buydowns as standard incentives on new construction.
If you sell or refinance your home during the buydown period, any unused funds remaining in the buydown escrow account are returned as a principal reduction applied to your loan balance at payoff. The money is not forfeited — unlike paying points for a permanent rate reduction, unused buydown funds are returned to the borrower's benefit.
What Our Clients Say
5.0 ★ · 32 Google reviews
Reviews are sourced from Google. Reviewers are not compensated. Individual results vary.
Levi Renninger
2 months ago
Omar is the best and most dynamic mortgage broker in San Diego. He is highly knowledgeable, honest, and responsive. He truly always keeps his client's best interest in mind and continues to advocate for them throughout the process. After 18 months of looking for a refinance with > 4 different brokerage firms, Omar was the one to finally get the job done. He was able to use his network of banks to find the right match for me to refinance my mortgage despite the HOA having outstanding repairs necessary to balconies, which had been blocking me and anyone in my community from refinancing for the past 1.5 years. He is very personable and goes above and beyond, often answering outside of typical work hours which was never expected but appreciated. We secured a great loan for myself that almost sounded too good to be true, but with no catches. When interest rates drop 1% whether it is in 1 year or 10 years, Omar will be the first person I contact!
Diane Flood
2 months ago
Omar is one of the nicest men I have ever encountered. He is very respectful and is always there for me, even on weekends he will return my calls. I know I should not call him during the weekends, but he always makes everything easier on me when I am in a panic for whatever situation I am in. He makes everything 100% better. When I first got my reverse mortgage, Omar was on top of each and every detail and solved all my requests and concerns. He definitely knows how to sooth one's mind while in a panic. He always does for me. I highly recommend Omar as an advisor. Thank you, Omar you are, the best indeed. Fondly, Diane F.
Rachel Rosenthal
2 months ago
We had a great experience working with Omar to purchase our first home. As first-time homebuyers, we appreciated his knowledge of the market, current rates, and the entire mortgage process. He was always available to answer our many questions, explain each step clearly, and put us at ease throughout the experience. We would recommend Omar to anyone looking for a knowledgeable, responsive, and honest mortgage broker!
Michael Herrera
3 months ago
(Translated by Google) It was a pleasure working with you and having you guide us through the entire process. Your manner is always very friendly. 100% recommended (Original) Fue un placer trabajar contigo y que nos giaras en todo el proceso y tu trato siempre es muy cordial. 100% recomendado
Kensuke Yamamoto
3 months ago
This was my second time working with Omar, and once again, he exceeded my expectations. I chose to work with him again because of the excellent experience I had the first time, and he continued to deliver outstanding service. From start to finish, Omar was incredibly responsive, professional, and easy to work with. Whenever I had a question, he replied quickly and always took the time to make sure I fully understood the answer. What really sets Omar apart is how well he guides his clients through the mortgage process. He clearly explained each step, kept me informed about what to expect next, and made sure I always knew where we were in the process. Buying or refinancing a home can be overwhelming, but Omar made everything feel smooth, organized, and stress-free. He was also very efficient and kept everything moving forward without unnecessary delays. I truly appreciated his patience, attention to detail, and commitment to providing exceptional customer service. It’s rare to find someone who is not only knowledgeable and efficient but also genuinely cares about making the experience as easy as possible for their clients. That’s why I came back to Omar a second time, and I wouldn’t hesitate to recommend him to anyone looking for a trustworthy, responsive, and dedicated mortgage broker. Thank you again, Omar, for another outstanding experience!
Lycia Rios
7 months ago
We had an excellent experience working with Omar for our HELOAN to secure the down payment on our second home. From start to finish, he demonstrated incredible knowledge and experience in navigating the lending process. He took the time to explain every detail clearly, answered all of our questions, and made sure we fully understood our options. What truly stood out was how committed he was to acting in our best interest as borrowers. He carefully evaluated different scenarios to ensure we were making the smartest financial decision for our family. We never felt rushed or pressured — just genuinely supported. On top of his professionalism, he is friendly, approachable, and easy to communicate with, which made what could have been a stressful process feel smooth and manageable. We are so grateful for his guidance and highly recommend him to anyone looking for a knowledgeable and trustworthy mortgage professional!
Antonio
10 months ago
It’s hard to describe the experience my wife and I just had with Omar. In contrast to previous accounts with “professionals“ he shined bright. The communication, consistency and patience he had for us in our situation, was an absolute breath of fresh air in a cut throat and unforgiving industry. If I could give him 10 stars I would.
Crrz99 C.J
11 months ago
Awesome person to work with I’m grateful for helping me purchasing our first home :) Hope I can work again with you soon.
Iris Urvina
11 months ago
Omar is an exceptional broker who truly goes above and beyond. My sister and I were previously stuck in an unfair loan and felt discouraged, thinking we wouldn’t qualify for anything better given our financial situation. Omar took the time to carefully research our options and quickly found a solution that put us in a much better position. He made the entire process clear and stress-free, walking us through every question and detail. Even after closing, he continues to check in and guide us toward our future goals. We’re extremely grateful for his support and expertise!
Patrick Yrigoyen
11 months ago
Working with Omar to purchase my first investment property was an absolute pleasure. The entire process was quick and painless, thanks to his professionalism and proactive approach. Omar asked for everything he needed upfront, which eliminated the usual back-and-forth and made the experience incredibly smooth. He kept us informed with timely updates and was always available to answer questions. One standout moment was when Omar flagged a property that was underinsured—his advice helped us avoid potential issues that could have surfaced down the line. That level of diligence and care truly sets him apart. If you're looking for a mortgage broker who is thorough, communicative, and genuinely invested in your success, Omar is the one. Highly recommended!
Juan Dario
11 months ago
Omar helped us with the purchase of our first home. He was very helpful every step of the way. Every question we had, he made sure to answer. Very professional, I would totally recommend. Very satisfied. Thank you Omar
Jorge Zambada
11 months ago
Great experience with Omar, very clear, always available for any questions, transparency of all payments, proactive when it comes to anticipating next steps. I strongly recommend Omar for your next home loan.
Amy Genao
1 year ago
Omar was referred to me from multiple friends as a top mortgage broker, and from our first conversation, I could see why. He listened to me patiently, asked insightful questions, and took the time to explain every detail in plain language. What really impressed me was how knowledgeable he is—not just about mortgages, but the broader financial landscape. Omar’s approach is proactive, thorough, and refreshingly human as he’s genuinely invested in helping his clients succeed. I’m grateful for his guidance and would wholeheartedly recommend Omar!
Lucia Alvarado
1 year ago
Omar Michel is an amazing mortgage loan officer. When I purchased my townhome as a first time buyer, the process was smooth from start to finish, and he was always available to answer all of my many questions without hesitation. Omar took the time to walk me through my options, offering great flexibility that made the experience stress-free. He worked hard to help me secure low rates, and I genuinely felt like I was in good hands the entire time. We still keep in contact, and I’d recommend him to anyone looking for a knowledgeable and dependable mortgage professional.
Lizz Coble
1 year ago
I’ve worked with Omar multiple times, and he always goes above and beyond for my clients. He works hard to present them with different loan options so they can make the best decision for their situation. What really sets Omar apart is his availability and responsiveness. No matter the time or question, he’s always there to provide clarity—for both my clients and me as their agent. His dedication, knowledge, and commitment to great service make every transaction so much smoother!
Monica Medina
1 year ago
Amazing! Omar Michel was extremely professional and helpful. He was very flexible and knowledgeable. He answered all my questions and took the time to research to provide the best outcome .I highly recommend Omar for all your important decisions.
Allan Balestrini
1 year ago
Omar is the best financial advisor, I highly recommend him! I got the house of my dream with the best interes rate because of his advices!
Tori Peck
1 year ago
Omar made everything so seamless and easy for me! There are many options when considering a Mortgage Advisor but choosing Omar is a no brainer. He is customer service at it's finest! He was able to find me low rates with lots of flexibility and his availability was endless! I highly recommend Omar Michel!
Yvonne Ramge
1 year ago
As a Realtor it is important to work with competent and trustworthy Mortgage Loan Advisors. I have worked with Omar Michel since 2012. Not only is he knowledgeable with every mortgage product/program he is always responsive and professional. I reccomend Omar to anyone looking to purchase or refinance their property!
Araceli Lopez
1 year ago
Omar was an absolute pleasure to work with for my mortgage loan. He was patient, courteous & very knowledgeable. He explained my options to acquire the best low rates. He was flexible with my capabilities & always available for my questions. I highly recommend him & have already put him in contact with some of my friends.
Sven M
1 year ago
I have been working with Omar since I bought my first home in 2009. He helped answer all my new homeowner questions. He was patient and responsive throughout the whole process. The reason I keep going through Omar for refinancing and new mortgages are his low rate options. He always has great advice and locks in the rate when you are comfortable. Thank you for helping me through all the years and transactions.
Diego Luna
1 year ago
Omar has shown me He is an incredible person to work with. He is able to provide me with many options of low rates for mortgages. I appreciate that when I have a question he is quick to respond back with the answer that I am looking for. I highly recommend Omar, for anyone looking for a reliable loan.
TeslaFanatic1614
1 year ago
Omar is super flexible, he met us on our terms, helped us get the lowest rate and close the deal in record time, his flexibility helped close a complicated deal in a timely manner
Jennifer Delacruz
1 year ago
I have worked with Omar a few times on refinancing my home. He has been constantly available and I’m made to felt like I’m his only client. I trust his knowledgeable expertise, and I will always have the lowest rates and the best personalized service. I recommend Omar hands down to my friends and family.
Jonathan Zavala
1 year ago
Cascada Mortgage Advisors provided an exceptional experience from start to finish! They offered a wide range of options, ensuring I found the perfect mortgage to meet my needs. Their team demonstrated incredible flexibility, tailoring solutions that worked with my financial situation and timeline. I was particularly impressed by their availability—they were always ready to answer my questions and guide me through the process. Plus, they secured incredibly low rates, saving me money in the long run. I highly recommend Cascada Mortgage Advisors to anyone looking for professional and reliable mortgage services!
Daniel Laguna
1 year ago
Working with Omar was an incredible experience. As a first-time homebuyer, I was both nervous and admittedly a bit needy throughout the process. Omar and his team were patient, understanding, and incredibly supportive every step of the way. He provided me with plenty of options tailored to my needs, offering the flexibility to choose what worked best for me. His availability to answer all my questions (and there were a lot!) and his ability to find me low rates made the entire journey much less stressful. I couldn’t have asked for a better guide through the mortgage process. I’m so happy to see him running his own brokerage now, and I wouldn’t hesitate to work with him again. Five stars all the way! This version highlights your personal experience and makes the review feel more genuine. What do you think?
Sara I. Sandoval
1 year ago
I have had the pleasure of working with Cascada Mortgage, specifically with Omar Michel, the owner, on three separate loans so far. The reason I keep going back to Omar is his ability to find the best interest rates and loans for my needs. Omar and his staff are very knowlegeable when it comes to the current mortgage market and are always readily available to ensure every step of the loan process is correct and secure. I appreciate their flexitility and availibility while processing my loan requests. I highly recommend Cascada Mortgage Advisors, Inc, for all of your mortgage needs.
David B
1 year ago
Omar is amazing!!! He is so responsive and attentive! Very knowledgeable and gives weekly updates. He's so patient and explains the entire process step by step . He is my go to guy with any loans. I highly recommend him ! ⭐⭐ ⭐ ⭐ ⭐.
Alex Z
1 year ago
I highly recommend Omar Michel. He’s helped me on numerous mortgage loans and all my clients love him. He’s always available to take my calls and breakdown the process in simple terms. My clients choose to work with Omar, because he always has options for them and give them low rates, which most others cannot compete with.
Ready to Explore a Seller-Paid Buydown on Your Purchase?
We'll show you exactly how to structure a buydown request and which program makes the most sense for your San Diego purchase — from our network of 100+ wholesale lenders.
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