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Buyer Tool · The Realtorian

Rate Buydown Calculator

A lower payment for the first years, so you can settle into your new home

See how a 3-2-1, 2-1, 1-1 or 1-0 temporary buydown changes your monthly payment year by year, what it costs, and how that money compares to a price reduction.

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Buydown Details
Principal and interest only; taxes and insurance not included
Purchase Price & Loan
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$
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Dollar and percent fields update each other automatically

Loan Terms
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Buydown Type

Rate is 3% lower in year 1, 2% lower in year 2 and 1% lower in year 3, then the full rate for the rest of the loan.

Year 1 Monthly Payment
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Fill in your loan details and click Calculate
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Your buydown schedule will appear here
Enter a home price, down payment and note rate, pick a buydown type, and see your payment year by year.
Buying or selling in Upstate SC?
Ask David whether a buydown fits your deal
A seller-paid buydown can be negotiated into an offer. David can help you weigh it against a price reduction and connect you with local lenders who can quote exact numbers.
Contact David Full Mortgage Calculator
This calculator provides estimates for informational purposes only. Payments shown are principal and interest only and do not include taxes, insurance, PMI or HOA dues. Buydown availability, cost and who may pay for it depend on your lender and loan program. It is not an offer or approval of credit. Always consult with a licensed lender for exact figures.
How a Temporary Buydown Works
What it is

A temporary buydown lowers the rate used to figure your payment for the first one to three years. After that, your payment goes to the full note rate for the rest of the loan. Your note rate itself does not change.

Who pays for it

The cost is the difference between the full payment and the reduced payments during the buydown years. That money is usually put up front at closing, often by the seller or a builder, and set aside to cover the gap each month.

The four types

3-2-1: 3% lower in year 1, 2% in year 2, 1% in year 3.
2-1: 2% lower in year 1, 1% in year 2.
1-1: 1% lower in years 1 and 2.
1-0: 1% lower in year 1 only.

Buydown or price cut?

A price reduction lowers the payment a little for the whole loan. A buydown lowers it a lot for a few years. Loan programs limit how much a seller can contribute, so ask your lender what applies to your loan before you write the offer.