Buydown definition

A large, unscheduled payment made by a borrower to a creditor in order to reduce some or all of the borrower’s outstanding debt. If allowed by the terms of the loan, a buydown reduces the amount of the regular payment.

(finance) An accelerated repayment of the principal of a loan.

(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.