Mortgage buydowns and subsidies in today’s talent-focused relocation policies
Concerns about higher living and housing costs following a move have been among the top drivers of reluctance to accept relocation offers, historically. Today, with mortgage rates taking a turn higher, concerns about increased home financing costs are also weighing on the minds of top talent who are asked to relocate. Whether the motivation to assist a homeowner is a differential in the costs of housing and/or living, or to lessen the shock of a significant increase in mortgage rates, there are several benefits of a mortgage buydown/ subsidy approach a mobility program manager should consider:
Applying a buydown/ subsidy does not prohibit the mortgage from being refinanced in the future if rates come down.
Overall, there are benefits to both the employer and transferee when incorporating buydowns/ subsidies into relocation policies. Overcoming move reluctance related to concerns about higher living, housing and/or financing costs at the destination is key to promoting acceptance of a relocation offer. Further, because buydown/subsidy provisions help employees gradually assimilate to higher costs, the ability to retain homeownership status following a move can be a critical contributor to longer-term talent retention.
In summary, there are a range of options to consider for addressing high housing and/or living costs or assisting your relocating employees with financing home purchases in a volatile rate environment.
Your U.S. Bank client relationship team is available to guide you to options that best suits your program’s unique needs. The team is also positioned to offer insights into how best to track and report these sorts of programs, assist with composing a business case for utilization of the benefits, walk you through options for a particular transferee and help you gain a clear understanding of estimated costs.
Read more about how homebuying and mobility trends impact employees and connect with corporate relocation experts and home lending specialists.