A temporary 2-1 buydown loan is a mortgage option where the borrower's interest rate is reduced by 2% in the first year and 1% in the second year, before returning to the full rate in the third year and beyond. This structure lowers the monthly payments during the first two years, making the loan more affordable at the start. The buydown is typically paid for by the seller, builder, or lender as a credit at closing. It's a popular choice for buyers who expect their income to increase or plan to refinance before the full rate applies.