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Free calculator · Estimates only

Temporary buydown calculator.

Compare 1-0, 2-1, and 3-2-1 temporary buydowns side by side: the reduced payment each year, the payment at the note rate, and the estimated cost.

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How to use itEstimates only
  1. Enter the loanLoan amount, note rate, and loan term.
  2. Press CalculateSee all three buydown types at once.
  3. Compare the costEach card shows the estimated buydown cost.

The calculator opens with example numbers. Replace them with your own.

Calculator

Temporary buydown calculator

Compare 1-0, 2-1, and 3-2-1 temporary buydowns. Enter your loan, then select Calculate. The calculator opens with example numbers; replace them with your own.

This calculator needs JavaScript. Turn it on to see your estimate, or call or text (480) 526-4505.

Permanent payment at note rate

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Principal and interest after the buydown years end.

Estimates only and do not constitute a loan offer or commitment. Buydown funds are typically paid by the seller, builder, or lender as a credit at closing and held in escrow to subsidize the reduced payments shown below. Program availability, structure, and cost vary by lender and loan program. Consult a licensed loan officer for exact figures.

Payment by year

Monthly principal and interest for each buydown, with the rate for that year.

Monthly payment by year for each buydown
Year1-0 Buydown2-1 Buydown3-2-1 Buydown

Ready for real numbers?

This calculator gives you an estimate. A licensed loan officer can tell you whether a buydown is available for your loan and what it would cost.

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How it works

Using the temporary buydown calculator.

A temporary buydown lowers the rate for the first years of the loan. After that, the payment is based on the note rate.

What the inputs mean

Loan amount
The amount you plan to borrow.
Note rate (permanent)
The rate on the loan after the buydown years end. The calculator opens with an example rate. Replace it with a rate you were quoted or want to test.
Loan term
30, 20, or 15 years. Press Calculate to update the results, or Reset to restore the example numbers.

How to read your results

  • Permanent payment at note rate is the principal and interest payment after the buydown ends.
  • A 1-0 buydown lowers the rate by 1 point in year 1. A 2-1 lowers it by 2 points in year 1 and 1 point in year 2. A 3-2-1 lowers it by 3, 2, and 1 points in years 1 to 3.
  • Each card lists the rate and payment for each buydown year, then the payment at the note rate.
  • Est. buydown cost adds up the monthly payment difference for each buydown year, times 12.
  • The table compares all three buydown types year by year.

What this calculator does not include

  • Property tax, homeowners insurance, mortgage insurance, and HOA dues. Results are principal and interest only.
  • Whether a buydown is available for your loan, or how you qualify. Eligibility and qualifying rate rules vary by program.
  • Who pays. A seller, builder, or lender may pay the cost, and the funds are held in an escrow account to cover the difference each month.
  • Other closing costs, or permanent rate buydowns with discount points.

Results are estimates for educational purposes. They are not a loan offer or a commitment to lend. Program availability, structure, and cost vary by lender and loan program.

Keep exploring

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FAQ

Temporary buydown questions.

What is a temporary buydown?

A temporary buydown lowers your interest rate for the first years of the loan, then the payment returns to the note rate. A 1-0 buydown lowers the rate by 1 percentage point in year one. A 2-1 lowers it by 2 points in year one and 1 point in year two. A 3-2-1 lowers it by 3, 2, and 1 points in years one to three.

Who pays for a temporary buydown?

A seller, builder, or lender may pay the cost. The funds needed equal the total payment difference over the buydown years, and they are held in an escrow account to cover the difference each month. Eligibility and qualifying rate rules vary by program, and results here are estimates only.

How is the buydown cost estimated?

For each buydown year, the calculator takes the difference between the payment at the note rate and the reduced payment, multiplies it by 12, and adds the years together. It uses principal and interest only.

What happens after the buydown years?

Your rate and payment move to the note rate for the rest of the loan. The calculator shows that payment as Year 2+, Year 3+, or Year 4+, depending on the buydown type.

Is this a loan offer?

No. The results are estimates for educational purposes, based on the numbers you enter. They are not a loan offer, a loan approval, or a commitment to lend.

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