Kanetix Forum

I was talking about this with my neighbour recently as we are looking to purchase our first home; Can you please give me more information about a 'buy down loan'? My neighbour mentioned it to me, but it would be great if you could explain it again.

Thanks!

I'd love to explain:

A buy down loan is a mortgage with a starting interest rate below the interest rate stated on the promissory note. This is when a lender lowers the starting rate in return for an interest rate subsidy which is paid for by the seller, buyer, builder, or lender.  This is not commonly used in Canada.

Paul Sidhu, Principal Mortgage Broker at KTX Financial Ltd.

Neither Kanetix® nor the KanetixForum.ca is a mortgage broker or agent. Although this information has been passed along to you from KTX Financial through the Forum, we are not responsible for the opinions expressed by them. Mortgages can be complicated. When reading these answers, keep in mind each person¿s situation is unique. Individual responses may vary depending on your lender, geographic location, and specific circumstances. If you have a similar situation, always speak with your mortgage provider, or a licensed mortgage representative, for terms and conditions that may apply to you.