Freddie Mac’s latest weekly survey came out October 1, and the average 30-year fixed rate is now 7.28%, up from 7.03% the week before. A year ago it was 6.34%. Not many buyers I talk to are excited about that.
What I keep telling folks around Redding is that the rate on the news isn’t always the rate you end up paying. When a seller is motivated, you can ask them for a credit and put it toward your rate. That can lower your monthly payment more than a price cut of the same size would. It’s one of the most useful tools we have this fall, and I don’t think enough buyers know about it.
Below I’ll walk through the three main options, run some rough numbers on a $400K Redding home, and cover the rules that limit how much a seller can actually contribute.
Seller Credits: The Starting Point for Redding Buyers in 2026
A seller credit (lenders call it a “seller concession” or “interested party contribution”) is money the seller agrees to put toward your costs at closing. You write it into your offer. Instead of asking for $10,000 off the price, you ask for a $10,000 credit.
That credit can cover closing costs, prepaid items, or buying down your interest rate. That last one is the focus of this post.
Here’s why it matters. On a $360,000 loan at 7.28%, cutting the price by about $8,500 only lowers your payment by roughly $52 a month. Put that same $8,500 toward a rate buydown and you could save hundreds a month for the first couple of years. The seller nets about the same either way. The difference to you can be big.
How a Temporary 2-1 Buydown Works
With a 2-1 buydown, your rate is 2 points lower in year one, 1 point lower in year two, and then goes to the full note rate from year three on. The seller’s credit goes into an account up front, and that account covers the difference in your payment month by month.
Here’s the rough math on a $400,000 Redding purchase with 10% down ($360,000 loan) at a 7.28% note rate (principal and interest only):
- Year 1 (5.28%): about $1,995/month, roughly $469 less than full rate
- Year 2 (6.28%): about $2,224/month, roughly $240 less
- Year 3 onward (7.28%): about $2,463/month
- Approximate cost to fund it: about $8,500
A couple of things to be honest about:
- You still qualify at the full note rate. Fannie Mae requires lenders to qualify you on the full payment, not the lower year-one payment. A buydown makes the first two years easier, but it doesn’t help you qualify for a bigger loan.
- Year three is coming no matter what. If the full payment would stretch you too thin, a 2-1 buydown only puts that off for two years.
Where it really helps is giving you breathing room while you settle in, pay for move-in costs, or wait to see whether rates come down.
Permanent Buydowns: Paying Discount Points
A discount point costs 1% of the loan amount and lowers your rate for the whole life of the loan. How much each point lowers the rate depends on the lender and the market that day. A quarter-point drop per point is a common rule of thumb, but it’s only a rule of thumb, so get real quotes.
On that same $360,000 loan, if 2 points ($7,200) brought the rate from 7.28% to roughly 6.78%:
- Payment drops from about $2,463 to $2,342, which saves around $121/month
- Break-even is about 5 years ($7,200 ÷ $121)
Points make the most sense if you expect to keep the home and the loan for a long time. If there’s a real chance you’ll sell or refinance within a few years, you may never earn that money back.
Buydown Now or Refinance Later?
This is the question I get most, and nobody can promise you an answer. Here’s how I think about it:
- A 2-1 buydown pairs well with a “refinance later” plan. You get the lower payments early. If rates fall in the next year or two, you refinance. If they don’t, you’ve still had two cheaper years. One thing to ask your lender: if you refinance or sell early, what happens to any money left in the buydown account? It’s often applied to your loan balance, but confirm that in writing.
- Points are a bet that you’ll keep the loan. If you pay $7,200 in points and refinance 18 months later, most of that money is gone.
- Refinancing isn’t free. Expect closing costs again, and you have to qualify again at that time. Don’t count on a refinance that may or may not happen.
If you can comfortably afford the full payment and plan to stay put, points are worth a look. If you want relief now and think rates may ease, a temporary buydown is usually the more flexible choice.
Loan Limits on Seller Concessions in Shasta County
Every loan program caps how much a seller can contribute, and the cap is figured off the lower of the price or the appraised value:
- Conventional (Fannie Mae/Freddie Mac), primary home:
- Less than 10% down: 3%
- 10% to 25% down: 6%
- More than 25% down: 9%
- FHA: up to 6%
- VA: standard closing costs aren’t capped, but certain concessions, including temporary buydown funds, count toward a 4% limit
On our $400,000 example with 10% down, that’s up to $24,000 in seller credits on a conventional loan. That’s more than enough to fund a 2-1 buydown and help with closing costs too. One more thing: seller credits can’t be used for your down payment, and any credit above what your actual costs and buydown add up to is simply lost. Your lender will help us set the right number before we write the offer.
For Sellers: Concessions Can Help You Sell Faster
If your home has been sitting on the market in Redding, Anderson, or Shasta Lake this fall, a price cut isn’t the only move. Offering a credit for a buyer’s rate buydown in your listing can:
- Show buyers a lower monthly payment, which is what they actually budget around
- Help protect your sale price, which matters for appraisals and nearby comps
- Give you an edge over similar homes that are only advertising a price
I’ve watched a well-placed buydown offer get buyers in the door who had written a house off based on the list price. It’s worth talking through before you reduce the price.
Let’s Run Your Numbers
Every buyer’s situation is different, and these examples are rough. Your rate, credit score, loan type, and how motivated the seller is will all change the math. I’m happy to sit down with you and a trusted local lender, look at real quotes, and figure out whether a seller credit, a 2-1 buydown, points, or some combination makes sense for the home you want. No pressure. I just want you to have honest numbers to work with.
Call or text: 530-953-1100 · jcreteam.com/contact · [email protected]
Sources: Freddie Mac Primary Mortgage Market Survey (Oct. 1, 2026); Fannie Mae Selling Guide B3-4.1-02 (Interested Party Contributions) and B2-1.4-04 (Temporary Interest Rate Buydowns); HUD/FHA and VA seller concession guidelines. Payment figures are principal and interest only, are estimates, and exclude taxes, insurance, and mortgage insurance. This is general information, not financial advice. Please talk with a licensed lender about your situation.
About Justin Cartwright — Justin Cartwright is a third-generation Shasta County resident and licensed REALTOR® with Waterman Real Estate in Redding, CA. He and the JCRE Team specialize in helping buyers and sellers navigate the Redding and greater Shasta County market with honest guidance and genuine care. DRE License #02093872 · Waterman Real Estate, 1760 Churn Creek Rd, Redding, CA 96002 · 530-953-1100.
