Rocket Launches New 2-1 Temporary Buydown

Rocket Mortgage rolled out a new temporary buydown option covering the cost of a lower interest rate for two years.

“Welcome Home RateBreak” is a lender-paid 2-1 buydown program where borrowers get a two-point reduction for the first year and one point for the second year before returning to the note rate in the third year.

It is available to buyers who apply directly to Rocket Mortgage and those working with a mortgage broker partnered with Rocket Pro TPO. To be eligible, they must be purchasing a single-family home and have income equal to or less than 80% of their area median income.

The program operates through a special escrow account established and fully funded by Rocket Mortgage. The homebuyer is still responsible for taxes and insurance premiums.

The company estimates that more than 90 million people can take advantage of the program.

“Rocket is committed to creating and delivering unique programs that address the challenges homebuyers face today,” said Bill Banfield, Rocket’s Chief Business Officer and Economist.

 “Many buyers fear being stretched too thin during the early years of homeownership, especially as they consider the cost of new furnishings and special touches to make the new home their own. By lowering the interest rate for the first two years, “Welcome Home RateBreak” provides financial breathing room, giving consumers the confidence to enter the market and make their homeownership dreams a reality.”

A homebuyer with a $250,000 loan at a 6.99% rate (APR 7.399%) would typically pay $1,661 per month. With “Welcome Home RateBreak,” their first-year rate would be 4.99%, reducing the payment to $1,340. In the second year, the rate would be 5.99%, with payments of $1,497.

This results in savings of more than $5,800 in the first two years, according to company leaders. 

Detroit-based Rocket Mortgage is part of Rocket Companies.