Seller-paid rate buydown vs. price cut: the DFW math at 7.32%
Nearly half of home sales now come with a seller concession. On a typical Dallas–Fort Worth house, the same $8,000 is worth about $450 a month to the buyer as a rate buydown and about $50 a month as a price cut. How to offer it, what the lender caps are, and when a price cut still sells faster.
By the Sell Well Texas Group team · October 23, 2026 · Updated November 10, 2026
The 30-year fixed rate came in at 7.32% this week, the first drop since August, and a year ago it was 6.19%. Nobody is waiting on a rate rescue this fall. What has changed is on your side of the table: sellers gave a concession on more than 45% of September sales, the highest share for that month in years, and the concession buyers ask for most is money toward their mortgage rate.
If you are selling in Dallas–Fort Worth this winter and your home has sat for a few weeks, this is the cheapest lever you have. The same dollars that barely move a buyer’s payment as a price cut can move it a lot as a rate buydown, and that is what gets a stalled listing an offer. Here is the math on a typical DFW house, and how to offer it.
The house we will use
The DFW single-family median was about $385,000 in September. A buyer putting 10% down borrows $346,500. At 7.32% their principal-and-interest payment is roughly $2,380 a month (taxes and insurance come on top, and in Texas they are not small).
Now suppose you are willing to give up about $8,000 to get the deal done. There are three ways to give it, and they are not worth the same to the buyer.
Option 1: a price cut
Knock $8,200 off the price. The buyer’s loan shrinks to $339,100 and their payment drops to about $2,330.
Their saving: about $51 a month. They also pay slightly less in closing costs and property taxes, since both scale with price. The monthly difference is small, which is why a price cut of this size rarely changes a buyer’s mind on its own.
Option 2: a 2-1 temporary buydown
You deposit the same $8,200 into an escrow account at closing. For the buyer’s first year the payment is calculated at 5.32%, two points under the note rate. In year two it is 6.32%. From year three on they pay the full 7.32%.
- Year one: about $1,928 a month, a saving of $452.
- Year two: about $2,149 a month, a saving of $231.
- Year three onward: $2,380.
Your $8,200 is exactly the sum of those two years of savings, which is why lenders price it that way. The buyer still qualifies at the full note rate, so the buydown does not let them borrow more than they could before. And if they refinance early, the unused escrow goes to their loan balance, so the money is not wasted. The buyer’s lender confirms both in writing.
Who it attracts: buyers whose income is rising, or who expect to refinance if rates fall, and who want breathing room in the first two years. That is a lot of the first-time and move-up buyers looking in Frisco, McKinney and Mansfield right now.
Option 3: a permanent buydown with discount points
Instead of a temporary escrow, you pay points to lower the buyer’s rate for the life of the loan. A point is 1% of the loan amount, about $3,465 here, and as a rough rule buys a quarter of a percent off the rate. Two points, about $6,900, would take 7.32% to around 6.82%.
Their saving: about $117 a month, for all thirty years. That is roughly $42,000 of interest over the life of the loan. Against a price cut of the same $6,900, which saves them about $43 a month, the permanent buydown is nearly three times as valuable to the buyer, for the same cost to you.
The catch is that how much a point buys varies by lender and by day, and the benefit disappears if the buyer refinances or sells early. It works best for buyers who plan to stay five years or more.
Side by side
| You give up ~$8,000 as a… | Buyer’s monthly saving | How long it lasts |
|---|---|---|
| Price cut | ~$51 | Life of the loan |
| 2-1 temporary buydown | ~$452 in year 1, ~$231 in year 2 | Two years |
| Permanent buydown (2 points) | ~$117 | Life of the loan |
For the buyer’s payment, the price cut is the weakest use of your money. For you, a credit has one more advantage: the recorded sale price stays higher, which matters for the appraisal on the buyer’s loan and for the comparable sales in your neighborhood.
How much can you contribute?
Lenders cap what a seller can pay toward the buyer’s costs, so the credit has to fit the buyer’s loan:
- Conventional, buyer putting down less than 10%: 3% of the price, about $11,550 on our house.
- Conventional, 10% to 25% down: 6%, about $23,100.
- FHA: 6% of the price or appraised value, whichever is lower.
- VA: 4% of the appraised value for concessions beyond ordinary closing costs.
Those caps cover closing costs, prepaids and buydowns together, so an $8,000 buydown plus $5,000 of closing costs has to fit inside the buyer’s limit. Your agent asks the buyer’s lender which cap applies before you agree to a number.
How to offer it in DFW right now
- Write it as a seller credit toward closing costs, not a price change. Your net is identical either way. The credit keeps the recorded price higher and lets the buyer choose between the buydown and their closing costs.
- Advertise it before you need it. “Seller offers $8,000 toward rate buydown or closing costs” in the listing remarks pulls in buyers who have been priced out at 7.32%. A concession offered on day one beats a price cut on day forty-five.
- Know what you are competing with. Builders in Celina, Prosper, Princeton and Forney have been buying rates down for two years and push hardest at quarter-end. If a new build is your competition, a buydown matches their offer; a small price cut does not.
- Run your own net sheet first. The credit comes off your proceeds at closing like any other cost. The costs of selling in Texas guide lists every line, so you know what $8,000 does to your number before you offer it.
When the price cut still wins
Cut the price instead when the home is simply priced above the closed sales nearby, because no credit fixes an appraisal gap. Cut it when your likely buyer is paying cash or putting down a lot, since the rate matters less to them. And if a buyer asks for both a cut and a credit, run the net on each before answering; in the right neighborhood that is a reasonable ask, and in a thin price band it is not.
If you want to know what your home would bring today and whether a buydown or a cut would move it, ask a local agent for a free home value estimate. They can show the listing number next to a cash offer, so you see every option before deciding.
Sources
- Freddie Mac, Primary Mortgage Market Survey, week of October 22, 2026: 30-year fixed 7.32%, 15-year fixed 6.68%, one year ago 6.19%.
- Redfin, “Nearly half of homebuyers get concessions from sellers,” September 2026: 44.7% of August sales included a seller concession; more than 45% in September.
- Fannie Mae Selling Guide B3-4.1-02, interested party contribution limits: 3%, 6% and 9% of price by down payment.
- HUD Handbook 4000.1: FHA seller concessions capped at 6% of the lesser of price or appraised value.
- VA Lenders Handbook, Chapter 8: seller concessions above 4% of reasonable value are excessive.
- DFW median single-family price and inventory: September 2026 MLS summaries reported by Homes.com and M&D Real Estate.
Payment figures are principal and interest on a $346,500 loan and are rounded. How much a discount point buys, and the exact cost of a temporary buydown, are set by the buyer’s lender on the day they lock. This is general information, not a loan offer or financial advice.