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# Interest Rate Reduction Program

[Mortgage Programs](<https://lbcmortgage.com/mortgage-shorts/mortgage-programs/>) 

Interest Rate Reduction Program is a great tool to use and for some reason not a lot of people either know about it or use it.

So how it works — let’s say today’s market rate is 6%, so 2-1 buy down gives you a discount for the next two years.

1. The first year you get a 2% discount, you’re only going to be paying 4% for the first year.
2. Next year you’re going to get 1% discount, you’re going to be paying 5% interest rate.
3. And on the third year, you’re going to be paying 6%. That’s your rate that you’re getting now, but somebody has to pay for it. And in this case lender wants seller to pay for it.

Therefore, if you are now buying a property and trying to negotiate, it is better to ask for a seller’s loan. So the seller will pay the bank for your discount and you will buy your discount for the next two years.

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