How to Get a Lower Mortgage Rate in Phoenix in 2026: Buydowns, Assumable Loans and More

by Daniel Barash

By Daniel Barash, REAL Broker AZ, LLC | Updated November 1, 2026

Short answer: The average 30-year fixed rate was 7.32% on October 22, 2026, according to Freddie Mac, but that doesn't have to be your rate. In metro Phoenix right now, buyers are getting lower payments four main ways: seller-paid rate buydowns, builder incentives, assuming a seller's FHA or VA loan, and shopping more than one lender. Each one has tradeoffs, and the right one depends on the home and your plans.

Homes are sitting longer and there's more to choose from, which gives buyers room to negotiate. Here's how each option works, what it costs and when it makes sense.

Why is now a good time to negotiate a lower rate?

Because sellers have more competition. In Greater Phoenix, single-family inventory was 21,552 homes in September 2026, up 6.7% from a year earlier, with 4.3 months of supply and a median of 77 days on market, according to Phoenix REALTORS. When a home has been listed for two or three months, a seller is often more open to paying toward your rate than cutting the price.

Phoenix REALTORS president Sammy Glassman said in October, "Affordability today is often more about the monthly payment than the purchase price alone," and called seller concessions "a strategic tool for both sides."

Option 1: A seller-paid temporary buydown (2-1 or 1-0)

A temporary buydown lowers your rate for the first one to three years, then it steps up to the full note rate. In a 2-1 buydown, the rate is 2 points lower in year one and 1 point lower in year two. A 1-0 buydown lowers it 1 point for the first year only. The money comes from the seller, builder or lender and sits in a separate escrow account that covers the difference each month.

Example: $400,000 loan, 30-year fixed at 7.32%	Rate	Principal and interest per month
Year 1 (2-1 buydown)	5.32%	$2,226
Year 2	6.32%	$2,481
Year 3 and after	7.32%	$2,748

Example only, not a loan offer. Principal and interest only; taxes, insurance and HOA dues are extra. In this example the 2-1 buydown costs the seller about $9,458, the total of the monthly savings over two years.

Two things to know. First, you qualify at the full note rate, not the bought-down rate. Fannie Mae's rules say the lender "must qualify the borrower based on the note rate without consideration of the bought-down rate," and VA and Freddie Mac say the same. Second, it works best if your income is likely to rise or you expect to refinance if rates fall. If rates stay put, your payment goes up on schedule.

Option 2: A permanent buydown with discount points

Discount points lower your rate for the life of the loan in exchange for paying more at closing. "One point equals one percent of the loan amount," according to the Consumer Financial Protection Bureau. How much each point lowers your rate "depends on the specific lender, the kind of loan, and market conditions."

The math to run is the break-even point: what the points cost divided by what they save each month. For example, if one point on a $400,000 loan ($4,000) dropped the rate from 7.32% to 7.07%, it would save about $68 a month and take about 59 months, or almost five years, to pay for itself. That rate drop is an example, not a quote.

Points make the most sense when you plan to keep the loan a long time. A seller can pay for them as a concession, which turns their money into a lower rate for you instead of a smaller price cut.

How much can a seller pay toward your rate?

Seller concessions, including buydowns, are capped by loan type. These are the limits for a primary home:

Loan type	Seller concession limit
Conventional (Fannie Mae), down payment under 10%	3% of price
Conventional, 10% to 25% down	6% of price
Conventional, more than 25% down	9% of price
VA	4% of the home's reasonable value. Seller-paid discount points don't count toward the 4%.
USDA	6% of price
FHA	Ask your lender; FHA has its own interested-party limit

Sources: Fannie Mae Selling Guide B3-4.1-02, VA.gov and VA Loan Fees, and USDA's loan origination FAQ. Limits are based on the lower of sale price or appraised value for conventional loans.

Option 3: Builder rate incentives on new construction

Builders are the biggest source of below-market rates in the Valley right now, because they can fund the buydown through their own mortgage companies. Two current examples as of October 29, 2026:

Pulte Homes, Phoenix: limited-time offers on select quick move-in homes, including an FHA 30-year fixed at 4.75% (5.433% APR) and a conventional 30-year fixed at 4.99% (4.988% APR). Loans must be locked and closed by December 31, 2026, with Pulte Mortgage. Pulte Phoenix offers
Tri Pointe Homes, Phoenix Metro: a first-year rate as low as 3.25% (6.382% APR) with an FHA 30-year fixed 2-1 buydown on select move-in-ready homes, plus up to $40,000 in closing credit. Tri Pointe Phoenix Metro offers

Builder offers change often, usually require the builder's lender and apply only to select homes. Details as of October 29, 2026, subject to change. See each builder for full terms.

Compare the total deal, not just the rate. A big rate buydown can come with a higher price or fewer upgrades than a resale home with a seller credit. I walked through one new-build community in my Encanto by Blandford Homes post in North Mesa.

Option 4: Assume the seller's FHA or VA loan

An assumable loan lets you take over the seller's existing mortgage, rate and all. If the seller locked in at 3% a few years ago, that rate can come with the house. FHA, VA and USDA loans are generally assumable with the servicer's approval. Most conventional fixed-rate loans aren't, because they have a due-on-sale clause.

The catch is the equity gap. You take over the seller's remaining balance, and you have to cover the rest of the price in cash or with a second loan.

Example: $475,000 home	Monthly principal and interest
New loan: 20% down, $380,000 at 7.32%	$2,610
Assume $300,000 at 3.25% (25 years left), plus an $80,000 second loan at 8.5%, with $95,000 down	$1,462 + $615 = $2,077

Example only. The second-loan rate is hypothetical, and not every lender offers second loans for assumptions. Taxes, insurance and HOA dues are extra.

What to expect:

You still qualify. VA requires the buyer to be "creditworthy under VA's credit and underwriting standards," and FHA assumptions also require credit approval.
It takes time. VA gives servicers 45 days to decide on a complete application, so plan for a longer escrow.
Fees are capped. FHA's assumption processing fee can be up to $1,800. VA's is up to $300, plus a VA funding fee of 0.5% of the loan balance unless you're exempt.
VA sellers care about entitlement. If a non-veteran assumes a VA loan, the seller's VA entitlement stays tied up until the loan is paid off. A veteran buyer can substitute their own entitlement, which frees up the seller's.

Option 5: Shop more than one lender

It sounds simple, but it's real money. Freddie Mac research found that borrowers who got two rate quotes "could have saved as much as $600 annually," and those who got at least four "could have saved more than $1,200 annually." The CFPB recommends getting "at least three offers, in writing, so that you can compare them."

Compare the Loan Estimates side by side, including points and lender credits, not just the rate on the first page.

What about an adjustable-rate mortgage?

An ARM starts with a lower fixed rate for a set period, often five, seven or ten years, then adjusts on a regular schedule. "Many ARMs will start at a lower interest rate than fixed-rate mortgages," the CFPB says, and rate caps limit how much it can rise at each adjustment and over the life of the loan. It can work if you expect to sell or refinance before the fixed period ends. The risk is that your payment "could increase a lot, often by hundreds of dollars a month," if you keep it longer.

Which option is right for you?

Option	Best if you	Watch out for
Temporary buydown (2-1, 1-0)	Expect your income to rise or plan to refinance	Payment steps up on schedule; you qualify at the full rate
Discount points	Plan to keep the loan for many years	Break-even can take several years
Builder incentive	Want new construction and can close by the deadline	Must use the builder's lender; compare price and upgrades
Assumable FHA or VA loan	Have cash for the equity gap or can get a second loan	Longer timeline; not many listings have one
Shopping lenders	Everyone	Compare full Loan Estimates, not just the rate
ARM	Expect to move or refinance within the fixed period	Payment can rise after the fixed period

Frequently asked questions

What is a 2-1 buydown?

A 2-1 buydown lowers your mortgage rate by 2 points in year one and 1 point in year two, then it goes to the full note rate for the rest of the loan. The seller, builder or lender usually pays for it, and the money is held in escrow to cover the difference.

Can the seller pay to lower my interest rate?

Yes. A seller can pay for a temporary or permanent buydown as a concession, within the limits for your loan type: 3% to 9% for conventional loans depending on your down payment, and 4% for VA loans.

Are FHA and VA loans assumable?

Generally, yes. FHA, VA and USDA loans can be assumed if the buyer qualifies with the loan servicer. Most conventional fixed-rate loans can't be assumed because of a due-on-sale clause.

Do I qualify at the lower buydown rate?

No. For temporary buydowns, lenders qualify you at the full note rate, so the buydown helps your monthly budget but not how much you can borrow.

Are mortgage rates going down?

The 30-year average dipped to 7.32% on October 22, 2026, its first weekly drop in a while, and the Federal Reserve held rates steady on October 28. Nobody knows for sure where rates go next, which is why many buyers are choosing a lower payment now and a refinance option later.

Want help finding a lower payment?

I can look for listings with assumable loans, ask sellers about buydowns, and compare builder incentives side by side. I can also connect you with lenders I trust so you get more than one quote. Reply to any of my emails or call or text me at 480.906.3831.

For current rates and example payments, see my October 2026 mortgage rates post. If you're planning your month, here are things to do in Phoenix, Tempe and Chandler in November.

Payment figures are examples, not a loan offer. This is not financial or lending advice; talk with a licensed lender about your situation. Rates, limits and builder offers as of October 29, 2026, subject to change. Header photo: Kiwanis Lake and South Tempe, by Hunter Trick, CC BY-SA 4.0, via Wikimedia Commons.

Sources

About the author: Daniel Barash has spent 10 years in Phoenix-area real estate and works with buyers and sellers across Tempe, Chandler and the greater Phoenix area with REAL Broker AZ, LLC.

Daniel Barash | REAL Broker AZ, LLC | 480.906.3831