Paying extra money up-front for a mortgage loan to reduce the interest rate at the beginning of the loan.
A financing technique used to reduce the monthly payments for the first few years of a loan. Funds in the form of discount points are given to the lender by the builder or seller to buy down or lower the effective interest rate paid by the buyer, thus reducing the monthly payments for a set time.
A mortgage in which the lender receives a premium as an incentive to reduce the interest rate in early years of the mortgage. Loan payments start out relatively low and increase later.