How to Get 4% Mortgage Rates Now: Builder Buydown Guide
I've been getting the same question from investors for months: "When do you think rates will drop back to the 4s?"
My answer usually catches them off guard: "You can get 4% rates right now. Today. You just have to know where to look."
While everyone's obsessing over Fed meeting minutes and inflation reports, builders have been quietly offering mortgage rates 200+ basis points below market. And no, this isn't some obscure strategy that only works in theory. According to recent data from NewHomeSource and Stacker, 80% of builders were using mortgage buydowns in January 2026. Even more striking — 55% of builders are offering rates in the 4% range, with another 20% in the low- to mid-5% range.
Let that sink in. Market rates are hovering around 6.5-7%, and more than half of new construction comes with financing options starting with a 4.
This isn't charity. Builders have inventory to move, and buydowns let them keep list prices intact while dramatically improving affordability. But here's what matters to you: whether you're house hacking your next primary residence or adding SFR rentals to your portfolio, this is the most accessible path to below-market financing available right now.
Let me break down exactly how to find these deals, negotiate additional concessions, and avoid the traps that could cost you.
What Are Builder Buydowns and Why 80% of Builders Are Offering Them
A builder buydown is pretty straightforward: the builder pays money upfront to reduce your mortgage interest rate, either temporarily or permanently. They're essentially prepaying interest to the lender on your behalf.
Why would builders do this instead of just cutting prices? A few reasons, and they're all strategic.
First, price cuts create comps. When a builder drops their base price by $40,000, that lower number shows up in the MLS, affects appraisals for neighboring homes, and can tank values across the entire community. Builders hate this. They'd rather spend that same $40,000 on a rate buydown that achieves the same monthly payment reduction without officially lowering the home's value.
Second, monthly payment is king for most buyers. The builder knows that shaving $400 off a monthly payment closes more deals than advertising a lower purchase price. People budget in payments, not purchase prices.
Third, builders have been sitting on inventory. The National Association of Home Builders reported that two-thirds of builders were offering incentives to "move buyers off the fence" heading into 2026. When you've got completed spec homes generating holding costs every month, aggressive buydowns start looking like smart math.
Joel Berner, senior economist at realtor.com, put it bluntly: "Builders are pricing really aggressively during this slower selling season. They've got inventory that they need to move."
What's changed recently is the scale. We've gone from buydowns being a nice perk to buydowns being standard operating procedure for the majority of the industry. Some builders, including Metro Development Group, have been offering permanent buydowns to 4.99% on certain homes through late February 2026.
Permanent vs. Temporary Buydowns: Understanding Your Options for 4-5% Rates
Not all buydowns work the same way, and the difference matters more than most buyers realize.
Temporary Buydowns (2-1 or 3-2-1)
These reduce your rate for the first few years, then step up to the full note rate. A 2-1 buydown might give you 4.5% in year one, 5.5% in year two, then 6.5% for the remaining 28 years.
The advantage? Lower upfront cost for the builder, which means they might offer it more readily or combine it with other incentives. The disadvantage is obvious — your payment increases, sometimes substantially.
Temporary buydowns work well if you're confident you'll refinance within 2-3 years or if you expect significant income growth. They're also popular with house hackers who plan to add rental income (like converting a basement or renting rooms) that will offset the higher future payments.
But here's the catch I see investors miss constantly: if rates don't drop and you can't refinance, you're stuck with that full rate. Don't assume refinancing will be an option.
Permanent Buydowns
These reduce your rate for the entire loan term. If a builder buys your rate down from 6.75% to 4.75% permanently, that's your rate for 30 years.
Permanent buydowns cost builders significantly more — we're talking potentially $25,000-40,000 on a $500,000 home depending on how deep the reduction goes. That's why you see them more often on standing inventory (homes already completed) or in communities where sales have stalled.
For investors, permanent buydowns are gold. You lock in your cost of capital for three decades. Your cash-on-cash return projections don't need to account for payment increases. And if rates drop further? You can still refinance and potentially do even better.
The data from PulteGroup's disclosures shows what a typical permanent buydown offer looks like: a conventional 30-year fixed rate mortgage on a $500,000 home with 20% down might carry an effective rate 150-200 basis points below market if you have strong credit (780+ FICO).
How to Find Builders Offering Below-Market Rates in Your Target Market
Here's the frustrating reality: there isn't a single database that consolidates all builder buydown offers. These programs vary wildly by market, by builder, and sometimes by individual community within the same builder's portfolio.
But you can systematically find them. Here's my process:
1. Identify Markets with Builder Inventory Overhangs
Builders in markets where they overbuilt relative to demand are most motivated. Look for metros where new home inventory has been climbing — Phoenix, parts of Texas, Florida submarkets, the Mountain West. When builders are competing aggressively for buyers, incentives get richer.
2. Go Direct to Builder Websites
Major national builders (Lennar, D.R. Horton, PulteGroup, Toll Brothers, KB Home, Meritage) all advertise their current incentive programs online. Look for "Quick Move-In Homes" or "Inventory Homes" sections — these completed specs typically carry the best financing deals because they're generating holding costs.
3. Check Builder Preferred Lenders
Most buydown programs require using the builder's affiliated mortgage company. This isn't necessarily bad — the rate you're getting already factors in the builder's contribution. But do compare what their preferred lender offers versus market rates so you understand the true value of the buydown.
4. Call Sales Offices Directly
Online advertised rates are often just the starting point. Sales managers have discretion, especially on homes that have been sitting. A ten-minute phone call asking "What's your best current financing offer on standing inventory?" can surface deals that aren't publicly advertised.
5. Work with Agents Who Know the Builder Game
Some agents have relationships with multiple builder sales teams and stay current on which communities are offering the most aggressive terms. If you're working with an agent, ask them specifically about builder incentives — if they can't give you specifics, they might not be the right agent for this strategy.
Stacking Incentives: Negotiating Buydowns Plus Additional Concessions
Here's where it gets interesting. Buydowns are often just one piece of the incentive package builders will offer.
I've seen investors successfully combine rate buydowns with:
- Closing cost credits — $10,000-20,000 toward your fees
- Upgrade packages — Flooring, appliances, finishes included at no cost
- Price reductions — Yes, sometimes you can get both
- HOA fee coverage — Builder pays 1-2 years of dues
- Home warranty extensions — Beyond the standard coverage
The key to stacking is understanding the builder's priorities. Are they trying to close out a phase? Move the last few specs before their next release? Hit quarterly numbers?
Builders have marketing budgets allocated per home. If they're offering a $30,000 buydown and you don't need one that aggressive (maybe you're paying cash or have strong financing elsewhere), you might negotiate converting some of that value into price reduction or upgrades.
Kiplinger recently noted that mortgage rate buydowns and closing cost credits allow builders to "advertise lower monthly payments without officially reducing the home's base price." But that doesn't mean you can't negotiate on price too — especially if you're willing to close quickly on standing inventory.
Pro tip: End of quarter (March, June, September, December) is when publicly traded builders are most motivated to close deals. Their sales numbers affect stock prices. Use that urgency to your advantage.
The Fine Print: What Homebuyers Need to Watch Before Signing
Builder incentives aren't free money. The cost is built into the home's price, which means you need to make sure you're not overpaying.
Here's what to watch:
1. Appraisal Risk
If the home doesn't appraise at the contract price (which includes the implied cost of the buydown), you might need to bring more cash to closing or renegotiate. This is more common in communities where builders haven't established comps yet.
2. Lender Requirements
Using the builder's preferred lender is usually mandatory for incentive programs. Compare their loan estimates carefully. Some affiliated lenders have higher fees that offset part of the rate benefit. Also check if the buydown is contingent on specific loan products or down payment amounts.
3. Occupancy Requirements
Some builder financing programs require primary residence occupancy. If you're buying as an investor for a rental, confirm the buydown is available for investment property financing. Programs like PulteGroup's explicitly state terms based on conventional financing with specific down payments.
4. Deadline Pressure
Builders often put expiration dates on incentive offers — "Must close by February 27th" type language. These deadlines are sometimes real (tied to their rate lock with the lender) and sometimes negotiable. Don't let artificial urgency push you into a bad deal, but do recognize that buydown offers can disappear quickly when builder inventory tightens.
5. The Refinance Assumption Trap
I've seen buyers accept temporary buydowns assuming they'll refinance before the rate steps up. What happens if your property value drops and you can't refinance? Or if rates stay elevated? Model your worst-case scenario — can you afford the full payment if refinancing isn't possible?
6. Builder Reputation and Build Quality
A great financing deal on a poorly built home is still a bad deal. Don't let the excitement of a 4% rate blind you to construction quality issues. Get an independent inspection. Talk to existing homeowners in the community. Research the builder's warranty claims history.
Using JustPropertySearch to Filter New Construction Deals with Aggressive Incentives
Finding these opportunities used to require manually checking dozens of builder websites and making countless phone calls. JustPropertySearch makes this significantly easier.
Here's how I use the platform to identify buydown opportunities:
Filter for New Construction
Start by setting your property type to new construction only. This eliminates the resale noise and focuses your search on builder inventory.
Target Markets with Inventory
Use JPS market data to identify metros where new construction inventory is elevated relative to absorption rates. Higher inventory means more motivated builders, which typically means better incentive packages.
Look for Standing Inventory
Homes listed as "Quick Move-In" or with completion dates in the past are your targets. These are specs that builders are actively trying to move. The longer they've been sitting, the more negotiating leverage you have.
Cross-Reference Builder Communities
Once you identify properties on JPS, you can quickly cross-reference with the builder's website to see what incentive programs are currently offered in that specific community. Some communities within the same builder's portfolio have dramatically different offers based on local market conditions.
Save Searches in Key Markets
Builder incentive programs change frequently — sometimes weekly. Set up saved searches in your target markets so you're alerted when new inventory hits that might qualify for current buydown offers.
The investors I know who are consistently finding 4% financing aren't doing anything magical. They're just systematically searching markets with builder inventory, staying current on incentive programs, and moving quickly when the numbers work.
And right now, with 80% of builders offering buydowns and more than half hitting rates in the 4% range, the numbers are working more often than they have in years.
Stop waiting for the Fed. The deals are already here.
