Inflation Fighter Mortgage

With CUTX's Inflation Fighter, we'll knock off 1%* of your mortgage rate for your first year with a buydown mortgage. That's 12 months of lower payments! 


Looking to buy a house but not totally sure how you’ll also pay for minor home repairs and upgrades or the new appliances and furniture you really want? With CUTX's Inflation Fighter Buydown Mortgage, you could get a lower payment rate on the first year of your mortgage.  

Benefits of  Buydown Mortgage 
  • With a 1-0 buydown, we'll reduce your interest rate by 1%* on the first year of your loan at no cost to you!
  • A year of lower payments means you can ease into your first year of homeownership
  • More time to pay down bills, buy new appliances, or make some home improvements 
  • A year of bulking up your savings account 

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What is a buydown mortgage?

A 1-0 Buydown is a mortgage lending program that helps you get a lower mortgage payment during the first year of your loan term. In the first year, the principal and interest payment will be 1%* below the note rate. For the remainder of the term, the payment will be based on the note rate (the actual interest rate on the loan). Put simply, if your note rate were 6.5%, you’d get a year at 5.5% before the mortgage reverted back to 6.5% for the remainder of the loan term.
 

For example, let’s look at a 1-0 buydown on a $400,000 30-year fixed rate loan with a permanent interest rate of 6.5%.  During the first year of your loan, your interest rate will be at 5.5% for a monthly principal and interest payment of $2,271.16, saving you $257.12 on your monthly payment.  In the second year, your interest rate will become fixed at 6.5% with a monthly principal and interest payment of $2,528.28. That's a savings of $3,085.44 in monthly payments during the first year.  Monthly payment examples do not include funds collected for taxes, insurance or other escrowed items.

As prices for homes rise, CUTX's Inflation Fighter is a great solution to cut down on mortgage costs. Additionally, if rates drop, we'll be happy to help you refinance your loan!

 
 

Exclusive Benefits Include

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Reduced Rate

That first year of homeownership can be a struggle! Do yourself a favor and lock down a lower rate for your first 12 months of payments.

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With one quick call, you can find out how much you can afford. That makes your house hunting less complicated.

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Our digital tools allow you to handle most of your paperwork electronically, and our lending team will be available to answer any questions.




The right mortgage is the key to good living.

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Inflation Fighter Mortgage FAQs


A temporary interest rate buydown involves having a lower interest rate at the beginning of your mortgage. For example, although your permanent interest rate might be 7%, your interest rate for the first couple of years of your loan might be 6% or 5%, depending on the buydown term.

This has a couple of benefits for you.  First, you will save on interest expenses compared to traditional financing.  Second, your payment will be lower during the buydown period at the beginning of your loan term.  This can help you to cover other expenses such as remodeling, new furniture, lawn mower or anything else!

    1. Get started above, or give us a call! A consultation with one of our mortgage lending specialists will lead to you getting pre-qualified for a loan. 
    2. Our mortgage lending team can find out what loan amount you may qualify for and help you pick the best type of loan for you to buy the home of your dreams.  
    3. They can also help you create a strategy for coming up with a down payment and getting your finances in order as you work towards buying your new home.

When you take advantage of a temporary interest rate buydown, your initial interest rate is lower than the full interest rate reflected in your loan note. So, what makes up the difference in the interest?

The difference between the interest you would pay under the full rate and what you’re actually paying during the first year or two of the mortgage is placed in an escrow account.  This escrow account can be funded by CUTX, the seller of the property, a real estate agent or you.  Any interested party to the transaction can contribute funds to the account, and you can use multiple sources to maximize your benefit. 

Each month, a portion of your payment will be taken from the escrow account to make up the difference between what you’re paying during the buydown and what’s owed based on your actual interest rate. It’s that simple!

For example, let’s look at a 1-0 buydown on a $400,000 30-year fixed rate loan with a permanent interest rate of 6.5%.  During the first year of your loan, your interest rate will be at 5.5% for a monthly principal and interest payment of $2,271.16, saving you $257.12 on your monthly payment.  In the second year, your interest rate will become fixed at 6.5% with a monthly principal and interest payment of $2,528.28. That's a savings of $3,085.44 in monthly payments during the first year.  Monthly payment examples do not include funds collected for taxes, insurance or other escrowed items.

Members can use a couple of different types of temporary buydowns ranging from one to three years.

The first option is a one-year buydown, which is called a 1-0 buydown. With this option, your rate is 1% lower for the first year of the loan. Once that year is up, the rate adjusts back up to your permanent rate.  You can get a 1-0 buydown at no additional cost to you, which is a great savings advantage. This is our most popular option.

The second option is a 2-1 buydown. Your interest rate is lowered by 2% in the first year, then in the second year, the rate is 1% lower than the long-term rate.  Once the second year is up, the rate adjusts back to your permanent rate.  With this option, you will generally secure the additional buydown funds through negotiation with the property seller or your real estate agent.

The third option is a 3-2-1 buydown.  With this option, your interest rate is lowered by 3% during the first year, then in the second year the rate is 2% lower, then in the third year it is 1% lower than the long-term rate.  Once the third year is up, the rate adjusts back to your permanent rate.  As with the 2-1 buydown, you will generally secure additional buydown funds through negotiation with the property seller or your real estate agent; however, you can also use your own funds on deposit.

With the Inflation Fighter loan, many CUTX members will qualify for a lender credit that will fully cover the cost of a 1-0 temporary buydown option.  The Inflation Fighter is available on all fixed-rate conventional purchase money loans for primary residences and second homes available through mortgage investors Fannie Mae and Freddie Mac. 

The program is not available for refinanced loans or CUTX portfolio loan programs such as Jumbo, Fast Lane Mortgage, 95% No MI Program or ARM’s. The program is also not available for Home Equity, Second Liens, Investment Property, VA or FHA loans.

  • Save on interest: During the buydown period, you are not responsible for the extra interest.  It’s being paid from the buydown account and does not continue to accrue.
  • Lower Initial Monthly Payments: Your payment will be lower during the buydown period. You can use this money to make investments in your home after moving in, purchase furniture, make upgrades, etc. 

When doing a mortgage with a temporary buydown, the payment you will qualify for is based on what the permanent interest rate will be.  So, if you lock your loan at 6.5%, the amount you qualify for will be based on that rate, even if your initial rate is 4.5% or 5.5%.  This ensures that you will be able to afford the full payment when that time comes.

Mortgage rates are higher now than they have been in many years.  With the temporary buydown option, you can lock into a great rate now, with upfront savings.  If rates fall, you can refinance with CUTX in the future with great terms and savings.  Plus, if you refinance before your buydown term is over, the remaining buydown funds are applied to your outstanding loan balance!









Why CUTX?

I simply love this credit union location. My family has gotten several auto loans and personal loans there. I have been a member for over 30 years and my children have accounts also.

Elsa H.
I always feel like I’ve been given the best advice for me and my family. They really do put their members first.
Sonya M.
Great folks to work with and great rates! We saved a ton on our auto loans! Thanks, CUTX!
Russell V.

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*NMLS #576560 Credit Union of Texas provides mortgage loans through its affiliate Texas Mortgage Lending, LLC, NMLS #1641703. CUTX home loan programs are only available in Texas. Loans are subject to credit approval, CUTX's lending policies, and property approval. Advertised program is valid as of November 1, 2022 and subject to change without notice. The Inflation Fighter Buydown offer will effectively reduce the interest rate by 1% for the first year of the mortgage. A custodial escrow account will be funded by the lender-paid credit, up to a maximum amount of $6,500, and funds will be dispersed from the escrow account towards each monthly payment to account for the difference in interest during buydown period. Offer valid on fixed-rate conventional purchase money loans for primary residences and second homes eligible through Fannie Mae and Freddie Mac. Offer not valid on Refinance loans or CUTX portfolio programs (Jumbo, Fast Lane Mortgage, 95% No MI Program), Home Equity, Second Liens, Investment Property, FHA, VA or ARM products, and cannot be combined with any other discounts or promotions. Offer may not be redeemed for cash or credit and is nontransferable. Offer cannot be retroactively applied to any previously closed loans or loans already in process and is subject to changes or cancellation at any time at the sole discretion of CUTX. Additional restrictions/conditions may apply. Member must lock rate on purchase loan before 12/31/22 and must be claimed by locking initial rate between 30 and 90 days from the purchase closing date. This is not a commitment to lend and is contingent on qualification per full underwriting guidelines.