Rate Buydown Mortgage Calculator
This temporary buydown calculator shows what a buydown costs and whether an equal price cut would serve you better.
What This Calculator Does
The calculator prices a temporary buydown setup. It shows your lower payment for every subsidized year, then the full note payment once the subsidy ends, plus the escrow sum required and how that cost compares with a straight price cut of equal value.
Who Is This For
Got a seller or builder credit on the table? Weighing a rate buydown against a cheaper price? Run the numbers here, and see what you'll pay once the subsidy stops.
How It Works
Enter the price and down payment, then the note rate, term and buydown setup. You get the payment for each year, the escrow amount required, and what the same funds would do as an equivalent price cut.
Frequently Asked Questions
What is a temporary buydown?
A single deposit held in escrow. It covers the difference between the lowered payment and the one the note requires, and your chosen structure sets how long that lasts: one, two or three years from the start of the loan.
Who foots the bill for a buydown?
In most deals the seller or builder covers it, as a concession worked out in negotiation. A buyer can fund it as well. Before you commit, ask what else those funds could accomplish.
Which wins, a buydown or the same money as a price cut?
Your hold period decides it. Buydown savings are packed into the early years, then they're gone. A price cut makes the loan smaller, and that benefit lasts the entire term. So ask how long you expect to stay in this loan.
What do I pay once the buydown ends?
You owe the full note payment. The rate used for qualifying is the note rate too, never the bought-down one. If only the subsidized years fit your budget, change the loan size; the buydown is not the thing to adjust.