Finance Jeff Lang June 11, 2024

As your trusted real estate expert and negotiator, I'm thrilled to share some valuable insights that can benefit both buyers and sellers in our dynamic market. Today, I want to dive into a topic that's particularly relevant given the current interest rate environment: the 3-2-1 rate buydown.

What is a 3-2-1 Rate Buydown?

A 3-2-1 rate buydown is a mortgage financing option that can make homeownership more affordable, especially in the initial years of the loan. This program is structured to lower the interest rate for the first three years before it reverts to the standard rate for the remainder of the term. Here’s a quick breakdown of how it works:

  • Year 1: The interest rate is reduced by 3% below the note rate.
  • Year 2: The interest rate is reduced by 2% below the note rate.
  • Year 3: The interest rate is reduced by 1% below the note rate.
  • Year 4 onward: The interest rate returns to the original note rate.

This structured decrease in the interest rate can significantly reduce monthly mortgage payments during the first few years, making it easier for buyers to manage their budgets as they settle into their new homes.

Benefits for Buyers

For buyers, the 3-2-1 rate buydown offers an excellent way to ease into mortgage payments. The lower initial payments can provide financial flexibility, allowing you to allocate funds toward other essential expenses or investments. This can be particularly advantageous if you expect your income to increase over time or if you're planning significant financial moves in the near future.

Advantages for Sellers

Sellers can also benefit from offering a 3-2-1 rate buydown. By including this option in your listing, you can attract more potential buyers who might be hesitant due to higher interest rates. This strategy can make your property stand out in a competitive market, potentially leading to a quicker sale at a favorable price.


While the 3-2-1 rate buydown can be a powerful tool, it’s essential to consider the long-term implications. Once the reduced rate period ends, the mortgage payments will increase, so it’s crucial to plan accordingly. Additionally, the cost of the buydown is typically paid upfront, either by the seller, the buyer, or a combination of both.

Final Thoughts

Understanding the 3-2-1 rate buydown and how it fits into your overall real estate strategy can be a game-changer. Whether you’re buying your first home, upgrading to a larger space, or selling your current property, this financing option can provide the flexibility and appeal needed to achieve your goals.

If you have any questions or need personalized advice, don’t hesitate to reach out. As always, I’m here to help you navigate the Bay Area Peninsula real estate market with confidence and success.

Best regards,

Jeff Lang, JD/MBA

Master Certified Negotiation Expert

Jeff Lang

Jeff Lang


About The Author

Jeff Lang's career in real estate is a testament to his strategic, growth-oriented mindset and his dedication to helping clients navigate the unique landscapes of San Mateo County. With his focus on areas from Burlingame to San Carlos and Pacifica since 2011, Jeff has become an invaluable asset to those seeking the perfect balance of urban and suburban life. His appreciation for the county's temperate weather and easy access to a plethora of outdoor activities resonates deeply with his clientele, who seek both the vibrancy of urban living and the tranquility of suburban spaces.

Beginning his journey in commercial real estate in San Francisco in 1997 and later transitioning to residential real estate in La Jolla, Jeff has honed a deep understanding of the industry. Known for his professional, caring, and patient approach, he brings a results-oriented and responsive attitude to every transaction. Jeff's unique strength lies in his ability to outperform competitors by leveraging his extensive experience and education.

Jeff leverages his education having received his JD and an MBA, alongside numerous real estate certifications including Master Certified Negotiations Expert and Certified Luxury Home Marketing Specialist, enabling him to devise winning strategies for each transaction. His approach not only ensures success but also puts his clients at ease, earning their trust and loyalty.

Outside of real estate, Jeff's life is as dynamic and multifaceted as his professional pursuits. His hobbies range from trail running and hiking with his dog to playing golf, tennis, and pickleball, and he's an enthusiastic Peloton user. A proud graduate of law school at the age of 42 and an Ironman triathlon finisher, Jeff's achievements speak to his determination and commitment. These qualities, combined with his professional expertise, make him an exceptional choice for buyers, sellers, and investors—especially in the $2m+ range—who are looking for more than just a transaction but a partnership with a seasoned expert who will turn them into raving fans.

In his over two decades in real estate, Jeff is most proud of partnering with his clients to build the life of their dreams. It helps that Jeff is a negotiations shark, having competed nationally as president of the negotiations team in law school and as a Master Certified Negotiation Expert (MCNE). His MBA and JD also give him and his clients a competitive advantage in every transaction, leading to his listings selling for 4.8% more than the average San Mateo County agent and offers getting accepted 6x more frequently.

If you are looking for an agent who will take on your goal as their own and be relentless in their pursuit of achieving that goal, then you want Jeff as your partner. He’s completed five marathons, including one in Antarctica, and dozens of triathlons, including an Ironman. His passion for taking on a challenge and grinding away to craft creative solutions is unparalleled. Jeff has a natural talent for putting things in perspective, keeping your eye on the prize, and clarifying the strategy to provide opportunities for success in your transaction.

A few of Jeff’s other certifications include NAR’s ePro for advanced digital marketing and NAR’s Green Designations for sustainability in real estate, Pricing Strategy Advisor (PSA) certification, Keller Williams’ BOLD program, and Tony Robbins’ Mastery University. He is also a member of the Institute for Luxury Marketing. These help him and his clients outpace the competition by selling at a higher price and getting offers accepted more often. This track record and partnership continue to provide repeat and referral business, the basis for his growing business.

Reach out to Jeff for a free consultation to discuss your real estate goals. He would be happy to make your goals his and utilize his extensive experience to make it happen.


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If you're looking for a reliable real estate advisor in California, consider contacting Jeff Lang. He offers a free consultation to discuss your real estate goals and help you achieve them using his vast experience in the field.