Buydown

Alternative forms

• buy-down

Origin

buy + down

Full definition of buydown

Noun

1. (finance) An accelerated repayment of the principal of a loan.
2. (mortgage finance) A payment by a third-party to a lender to reduce some of all of the payments otherwise required, especially in first few years of the loan, thereby enhancing the apparent quality of the loan.

Synonyms

• (accelerated repayment of principal) prepayment, accelerated or lump-sum amortization.

Related terms

• buy down