Mortgage rates have not budged much. Freddie Mac's 30-year fixed averaged 6.36% the week of May 14, 2026 — about 45 basis points below where it sat a year ago, but still high enough that a $700,000 physician mortgage at 6.6% costs more in monthly interest than most attendings expected when they first ran numbers in residency. Physician-loan rates remain mid-6% to low-7%, with the usual 0.125%–0.50% premium over conventional and 25–50 basis points of dispersion across banks on the same file.

In a market like this, buyers and sellers are leaning hard on rate buydowns. Roughly 68% of sellers report offering concessions in 2026, and about a third of buyers are receiving them — averaging close to $8,500 per deal. The question is no longer whether a buydown is on the table. It is which structure actually helps you.

Here is how the four real options compare on a physician mortgage.

1. The 2-1 temporary buydown

A 2-1 buydown drops your rate by 2 percentage points in year one and 1 point in year two, then returns to the note rate. The cost — typically 2%–3% of the loan amount — sits in an escrow account at closing and is drawn down monthly to subsidize your payment. On a $500,000 loan at a 6.75% note rate, year one pays as if the rate were 4.75% — roughly $400/month less; year two as if it were 5.75% — about $200/month less.

A 2-1 makes sense when the seller is paying for it, you expect rates to fall enough to refinance inside the two-year window, or your income jumps after a fellowship-to-attending transition and the lower year-one payment bridges the gap. Two underappreciated points: if you refinance or sell before the buydown period ends, unused escrow is typically credited to payoff. And if you are paying for the buydown yourself, you are almost always better off applying that cash to a permanent rate reduction instead.

2. The 3-2-1 temporary buydown

A 3-2-1 stretches the same structure to three years: rate down 3%, 2%, then 1%, then full note rate. The cost runs 3%–4% of the loan amount — on a $700,000 loan, roughly $20,000–$28,000.

The 3-2-1 is the structure to push for when a builder or motivated seller is offering large concessions and the dollar amount fits inside the 3% (>90% LTV) or 6% (≤75% LTV) seller-concession ceilings most physician-loan portfolio programs publish. The three-year ramp is also a closer match to the income trajectory of a new attending finishing fellowship in spring 2026: year one bridges the move and partial-year W-2, year two captures the first full attending year, year three sees variable income on the books for the 24-month history rule.

3. Permanent discount points

Each discount point is 1% of the loan paid at closing in exchange for roughly a 0.25% rate reduction for life. On a $500,000 physician mortgage, one point costs $5,000 and saves about $80–$95/month — a break-even of roughly 4½ to 5 years.

Permanent points are the right structure when you are confident you will hold the loan past the break-even and are paying with your own funds rather than seller concession dollars. Physicians often over-buy points in a rising-rate market because the monthly savings look reassuring. Run the break-even against your honest hold period — if you are a day-one attending who has moved twice in five years, points probably do not pencil.

4. Lender credits — the mirror image

A lender credit is the inverse of points: the lender pays a portion of your closing costs in exchange for a higher rate, usually 0.125%–0.25% higher per credit unit. This is the right move when you are short on cash to close, plan to refinance inside three years, or want to redirect funds toward reserves the underwriter wants to see anyway.

The three traps in spring 2026

First, the seller-concession ceiling. Most physician-loan portfolio programs cap concessions at 3% of purchase price when LTV is above 90% — exactly where most physician borrowers operate. A 3-2-1 buydown on a $700,000 loan can blow through that cap before any closing costs are funded. Confirm the program's limit in writing before negotiating.

Second, the RAP cutover. The Repayment Assistance Plan goes live July 1, 2026 and lenders are already pre-underwriting projected RAP payments on files closing after that date. A buydown lowering your year-one payment does not help your DTI — lenders qualify on the note rate. If RAP pushes your back-end DTI past the program limit, no buydown saves the file. Only a larger down payment, less house, or a different loan structure does.

Third, the price-cut versus rate-cut comparison. On a $500,000 home, a $15,000 price cut saves about $95/month for thirty years. The same $15,000 spent on a 3-2-1 buydown saves $750/month in year one — but reverts. Run both numbers against the length of time you expect to hold the note. The answer is rarely the same twice.

The right buydown is not a product. It is a structure matched to your hold period, concession ceiling, and post-July student-loan picture. Get all three on paper before signing anything.

MedPharmaConnect is an educational resource, not a lender. Always verify specific terms, rates, and eligibility with licensed mortgage professionals.