Temporary Buydown Calculator
Compare 1/1, 2/1, and 3/2/1 buydown structures to see how much a seller credit can reduce your payments in the early years of your loan.
What is a temporary buydown?
A temporary buydown is a seller-paid (or lender-paid) credit that temporarily reduces the buyer's interest rate for the first 1–3 years of the loan, then reverts to the full note rate. The cost of the buydown equals the total monthly payment savings over the buydown period — this is the amount the buyer should ask the seller to credit at closing.
Buydowns are especially useful in a high-rate environment because they give buyers lower payments during the years when they're most likely to refinance if rates drop.
Loan Details
The total loan amount (not home price)
Your actual interest rate (e.g. 6.875%)
Fixed-rate loan term
Note Rate P&I Payment
$4,598.50/mo
Note Rate
6.875%
Loan Amount
$700,000
Buydown Comparison
1/1 Buydown
Seller Credit
$5,493
Year 1 Monthly Savings
$457.74
Year 1 Rate
5.875%
2/1 Buydown
Seller Credit
$16,221
Year 1 Monthly Savings
$894.04
Year 1 Rate
4.875%
3/2/1 Buydown
Seller Credit
$31,903
Year 1 Monthly Savings
$1,306.84
Year 1 Rate
3.875%
Detailed Breakdown
1/1 Buydown
Rate reduced by 1% for Year 1, then note rate from Year 2 onward
Seller Credit Needed
$5,493
Year 1 Monthly Savings
$457.74
| Year | Rate | Buydown P&I | Note Rate P&I | Monthly Savings |
|---|---|---|---|---|
| Year 1 | 5.875%(-1%) | $4,140.76 | $4,598.50 | $457.74 |
| Year 2+ | 6.875% | $4,598.50 | $4,598.50 | $0.00 |
Seller Credit Breakdown
2/1 Buydown
Most PopularRate reduced by 2% in Year 1, 1% in Year 2, then note rate from Year 3 onward
Seller Credit Needed
$16,221
Year 1 Monthly Savings
$894.04
| Year | Rate | Buydown P&I | Note Rate P&I | Monthly Savings |
|---|---|---|---|---|
| Year 1 | 4.875%(-2%) | $3,704.46 | $4,598.50 | $894.04 |
| Year 2 | 5.875%(-1%) | $4,140.76 | $4,598.50 | $457.74 |
| Year 3+ | 6.875% | $4,598.50 | $4,598.50 | $0.00 |
Seller Credit Breakdown
3/2/1 Buydown
Rate reduced by 3% in Year 1, 2% in Year 2, 1% in Year 3, then note rate from Year 4 onward
Seller Credit Needed
$31,903
Year 1 Monthly Savings
$1,306.84
| Year | Rate | Buydown P&I | Note Rate P&I | Monthly Savings |
|---|---|---|---|---|
| Year 1 | 3.875%(-3%) | $3,291.66 | $4,598.50 | $1,306.84 |
| Year 2 | 4.875%(-2%) | $3,704.46 | $4,598.50 | $894.04 |
| Year 3 | 5.875%(-1%) | $4,140.76 | $4,598.50 | $457.74 |
| Year 4+ | 6.875% | $4,598.50 | $4,598.50 | $0.00 |
Seller Credit Breakdown
How to Use This Calculator
Choose your buydown
The 2/1 buydown is the most common. The 3/2/1 offers the biggest Year 1 savings but costs more. The 1/1 is the most affordable option.
Request the seller credit
Ask the seller to credit the "Total Seller Credit" amount at closing. This covers the full cost of the buydown — the buyer pays nothing extra.
Enjoy lower payments
Your payments are reduced during the buydown period. If rates drop, you can refinance — the buydown savings are yours to keep either way.
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Quick monthly payment estimate with amortization
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Conventional, VA, FHA & Jumbo with real PMI rates
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