Mortgage rates are still high: the average 30-year fixed rate was 7.18% for the week of November 5, 20261. But San Diego sellers are negotiating. From August through October 2026, 51% of residential sales in San Diego County closed below list price2. That gives buyers room to ask for something worth more than a small price cut: a seller credit that buys down the interest rate on the mortgage.
This guide from Whissel Beer Group, the #1 real estate team in California by homes sold, per The Wall Street Journal (RealTrends Verified 2026), explains seller concessions, how a 2-1 buydown works, what it costs on a typical San Diego home, and how to ask for one.
Kyle Whissel, co-founder of Whissel Beer Group, calls it "an opportunity out there a lot of agents aren't talking about." As he puts it in the video: "we're getting the seller to provide a credit for a buy down."
What are seller concessions?
Seller concessions are money the seller agrees to pay toward the buyer's costs at closing, written into the purchase contract. They can cover closing costs, prepaid items, or a rate buydown. Your loan program caps how much the seller can contribute. The cap depends on your loan type and, for conventional loans backed by Fannie Mae, your down payment3:
| Loan type and down payment | Max seller contribution | On an $899,000 San Diego home |
|---|---|---|
| Conventional, less than 10% down | 3% of the price | $26,970 |
| Conventional, 10% to 25% down | 6% of the price | $53,940 |
| Conventional, more than 25% down | 9% of the price | $80,910 |
| Conventional, investment property | 2% of the price | $17,980 |
| FHA loan | 6% of the sales price5 | $53,940 |
| VA loan | 4% of the VA appraised (reasonable) value6 | $35,960, if it appraises at the price |
$899,000 was the median residential sale price in San Diego County from August through October 20262. For conventional loans, the cap is based on the lower of the sale price or the appraised value. VA counts a seller-paid temporary buydown toward its 4% limit6. Confirm the details for your loan with your lender.
What is a mortgage rate buydown?
A rate buydown is an upfront payment that lowers the interest rate on your mortgage. There are two kinds:
- Permanent buydown: you (or the seller) pay discount points at closing to lower the rate for the life of the loan. How much each point lowers the rate depends on the lender.
- Temporary buydown: the payment is reduced for the first one to three years, then rises to the full note rate. The cost is the total of those payment savings, paid upfront into an account that covers the difference.
When a seller pays for either kind, the cost counts toward the seller contribution caps above3.
How does a 2-1 buydown work?
A 2-1 buydown (also written 2/1 or 2 1 buydown) lowers your rate by 2 percentage points in year one and 1 point in year two, then the full rate applies from year three. Here is what it looks like on the median San Diego home with 20% down ($719,200 loan) at 7.18%:
| Year | Rate you pay | Est. monthly principal and interest | Monthly savings |
|---|---|---|---|
| Year 1 | 5.18% | $3,940 | $932 |
| Year 2 | 6.18% | $4,396 | $477 |
| Year 3 and after | 7.18% | $4,872 | $0 |
The upfront cost is the total savings: about $16,900, or roughly 1.9% of the price. That fits well under the 6% seller contribution cap for a buyer putting 20% down. Estimates exclude taxes, insurance and HOA dues. To run the numbers on a different price or down payment, try our San Diego mortgage calculator.
A 3-2-1 buydown adds a third year: 4.18% in year one ($3,509 a month), then 5.18% and 6.18%, for an upfront cost of about $33,300. Fannie Mae allows temporary buydowns of up to 3 percentage points, for up to 3 years, rising no more than 1 point a year4.
One rule to know: your lender qualifies you at the full note rate, not the bought-down rate4. A temporary buydown lowers your first payments; it doesn't raise the price you can qualify for.
Temporary or permanent: which buydown is better?
- Temporary (2-1 or 3-2-1) makes the most sense if you expect rates to fall and plan to refinance, or your income will grow over the next few years.
- Permanent (discount points) makes more sense if you plan to keep the loan for many years.
- A lower price instead reduces your loan amount and your property tax base, but usually changes the monthly payment far less than the same dollars spent on a buydown.
Use a 2-1 buydown calculator, or ask your lender to price all three side by side, before you write the offer. A team agent can help you compare them.
How do you get the seller to pay for your rate buydown?
Ask for it in the offer, as a seller credit. A few things make a seller more likely to say yes:
- Know which homes have room to negotiate. Homes that have sat on the market or had price reductions are the best candidates. Some of the best opportunities never hit the public sites; here is how to find off-market homes in San Diego.
- Get your lender's buydown quote first, so your offer names an exact credit amount the seller can weigh against a price cut.
- Keep the rest of the offer strong, with a solid pre-approval and clean terms, so the credit is the main ask.
- Work with an agent who negotiates this regularly. Whissel Beer Group closed 1,042 transactions in 2025, and team agents are structuring seller-paid buydowns for buyers right now.
Every home and every seller is different. Want to know whether a buydown makes sense on a home you're looking at? Ask us. We're happy to run the numbers with you.
For more on today's rates, see what the Fed change means for San Diego mortgage rates, and our step-by-step guide on how to buy a home in San Diego.
Talk With a Team Agent About a Seller-Paid Buydown
- Buying? Talk with a team agent about your offer. The VIP Buyer Program™ covers a moving truck, a 13-month home warranty, the termite report, appraisal reimbursement and move-in setup fees, typically $1,800 or more, and it comes with the Love It or Leave It Guarantee™: if you're not happy in the home within 12 months of closing, for any reason, Whissel Beer Group sells it for you with no listing-side commission.
- Selling? Offering a buydown credit can help your home stand out. Find out what your home is worth.
- Questions? Call 619-815-5589.
Frequently Asked Questions
What are seller concessions in real estate?
Seller concessions are costs the seller agrees to pay for the buyer at closing, such as closing costs or a mortgage rate buydown. For Fannie Mae conventional loans on a primary home, sellers can contribute up to 3%, 6% or 9% of the price depending on the down payment. FHA allows up to 6% of the sales price, and VA up to 4% of the appraised value.
What is a 2-1 buydown?
A 2-1 buydown lowers the mortgage rate by 2 percentage points in the first year and 1 point in the second year, then the full rate applies. On a $719,200 loan at 7.18%, it saves about $932 a month in year one and $477 a month in year two.
How much does a rate buydown cost?
A temporary buydown costs the total of the payment savings. On the median San Diego home with 20% down at 7.18%, a 2-1 buydown costs about $16,900 and a 3-2-1 buydown about $33,300. Permanent buydowns are priced in discount points, which vary by lender.
Can the seller pay for my rate buydown?
Yes. A seller can pay for a temporary or permanent buydown as a seller credit, within your loan program's seller contribution limit. Your lender still qualifies you at the full note rate.
Sources
- Freddie Mac. "30-Year Fixed Rate Mortgage Average in the United States," Primary Mortgage Market Survey, week of November 5, 2026. Via FRED, Federal Reserve Bank of St. Louis. Accessed November 10, 2026. ↩
- San Diego MLS (SDMLS). Closed residential sales, San Diego County, August 1 to October 31, 2026 (5,681 sales). Data pulled November 10, 2026. ↩
- Fannie Mae. "B3-4.1-02, Interested Party Contributions (IPCs)." Selling Guide, May 7, 2025. Accessed November 10, 2026. ↩
- Fannie Mae. "B2-1.4-04, Temporary Interest Rate Buydowns." Selling Guide, August 7, 2024. Accessed November 10, 2026. ↩
- U.S. Department of Housing and Urban Development. "Mortgagee Letter 2006-04." FHA seller contributions of up to 6 percent of the sales price. ↩
- U.S. Department of Veterans Affairs. "Temporary Buydowns." VA Home Loans, last updated January 14, 2026. Accessed November 10, 2026. ↩
Disclosure: Payment figures are estimates of principal and interest only and exclude taxes, insurance and HOA dues. Whissel Beer Group is not a lender; your lender sets the rate, points and buydown pricing.
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