Mortgage Rate Buydown Strategy: How $10K Could Save You $164/Month

You’ve found the home you love. The list price? $400,000. You’re ready to make an offer, and naturally, you’re wondering if you should come in a little under asking — maybe $390K — to save some cash.

It feels like the smart move, right? But what if I told you there’s a strategy that could save you way more than just $10K off the purchase price — not just once, but every single month? Yep. Let’s talk about the $10K trick most buyers don’t even know exists.

The Smarter Play: Offer Full Price, Ask for a Concession

Instead of offering $390K on that $400K home, what if you offered full price — but negotiated a $10,000 seller concession?

Here’s what that could look like:

You offer the full $400,000…But ask the seller to give you back $10,000 to cover mortgage points.

What are mortgage points? Mortgage points (aka discount points) are upfront fees you pay at closing to reduce your interest rate. One point typically costs 1% of your loan amount and knocks off about 0.25% from your rate.

So let’s break it down with real numbers.

Real Life Example: Why This Trick Works

Let’s say you’re putting 5% down on a $400,000 home. That gives you a loan amount of $380,000.

Now imagine this:

•  You spend $10,000 on points (about 2.5 points)
•  Your interest rate drops from 7% ➝ 6.38%
• Your monthly mortgage payment goes from $2,661 ➝ $2,497

That’s $164/month saved — every month — for as long as you have the loan. Over just 5 years, that adds up to $9,840. Over 10 years? Nearly $20,000.

So instead of saving $10K upfront by offering a lower price, you’re creating thousands more in long-term savings — simply by shifting how the money is used.

But Why Would a Seller Agree?

Here’s the thing: a seller is usually more focused on the sales price than the net proceeds — especially if they want to keep the comps strong in the neighborhood. An offer at $400K with a $10K concession can be more appealing to a seller than an offer at $390K — because it still shows as a $400K sale on paper.

And for you? That $10K turns into serious savings over time.

Win-win.

When This Trick Works Best

This strategy isn’t one-size-fits-all, but it’s golden in a few key scenarios:

• You’re buying in a balanced or buyer-friendly market
•  The home’s been sitting for a few weeks and the seller is motivated
•  You want a lower monthly payment without waiting for rates to drop
•  You’ve got a little wiggle room in your loan approval for concessions

It’s also perfect if you’re planning to stay in the home for several years and want to maximize long-term savings.

How to Run the Numbers (The Easy Way)

You can Google a “mortgage points calculator” and plug in your scenario to see what the potential savings look like. Or… you can reach out to your mortgage pro (👋 that’s me!) and we’ll do it together.

I’ll help you compare both scenarios side by side — and show you if this strategy makes sense for your specific situation. Home buying is all about the strategy. And sometimes the best financial move isn’t the most obvious one.

So before you try to save a few thousand off the purchase price, ask yourself: Could I make my money work harder by using it to buy down my rate instead? Because while $10K might sound like a small shift… that $164/month in savings could be the difference between stress and stability.