📉 Rate Buydowns

Temporary Buydown Calculator

Compare temporary rate buydown options to see your real monthly savings, total costs, and long-term impact.

Supports 3/2/1 • 2/1 • 1/1 • 1/0 buydown structures

Built for buyers, agents, and investors evaluating seller-paid rate buydowns.

🎯 Key Loan Variables

Purchase Price

$

Interest Rate (Note Rate) The permanent rate after buydown

4% 7.000% 9%

Down Payment

0% 20% 30%

⚙️ Additional Settings

Loan Amount Auto-calculated

$

Loan Term

Who Pays for Buydown?

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Results = Estimates (Not an Offer) Buydown costs and payment comparisons shown are estimates for educational purposes only and are not a loan approval, commitment, or rate lock. Temporary buydowns reduce the interest rate for a set period (1-3 years), after which the rate returns to the original note rate. The buydown cost shown is the total subsidy required. Payments shown are principal & interest (P&I) only and do not include taxes, insurance, HOA, or mortgage insurance.

Building your comparison...

3/2/1 Buydown

3 years of lower payments

Your Year 1 Payment

$0

per month

at 4.000% interest

↓ $0 /mo less than full rate

Payment Progression

Yr 1

$0

→

Yr 2

$0

→

Yr 3

$0

→

Yr 4+

$0

2/1 Buydown

2 years of lower payments

Your Year 1 Payment

$0

per month

at 5.000% interest

↓ $0 /mo less than full rate

Payment Progression

Yr 1

$0

→

Yr 2

$0

→

Yr 3+

$0

1/1 Buydown

2 years of lower payments

Your Year 1 Payment

$0

per month

at 6.000% interest

↓ $0 /mo less than full rate

Payment Progression

Yr 1

$0

→

Yr 2

$0

→

Yr 3+

$0

1/0 Buydown

1 year of lower payments

Your Year 1 Payment

$0

per month

at 6.000% interest

↓ $0 /mo less than full rate

Payment Progression

Yr 1

$0

→

Yr 2+

$0

🔎 How This Calculator Works & Key Assumptions

This calculator provides estimates for educational purposes only. It is not a loan application, pre-approval, commitment to lend, or rate lock.

Temporary buydowns reduce the note rate for 1-3 years. A 3/2/1 buydown reduces the rate by 3% in year 1, 2% in year 2, and 1% in year 3 before reverting to the full rate.
The buydown cost equals the total interest savings during the reduced-rate period and is typically paid by the seller, builder, or lender as a concession.
Payments are P&I only — taxes, homeowner's insurance, HOA, flood insurance, and mortgage insurance are not included in the comparison.
Qualification is typically based on the full note rate (not the bought-down rate), though some programs may qualify at the Year 1 rate.
Buydowns are different from discount points — buydowns are temporary rate reductions, while points permanently lower the rate.

This tool helps you compare buydown options side-by-side so you can negotiate the best closing cost credit for your purchase.

Todd Hanley, RICP®, CMA™ | Senior Loan Officer | NMLS #1013665 | Todd Hanley Mortgage Team powered by United Direct Lending | NMLS #1013665 | 5550 Glades Rd, Suite 500, Boca Raton, FL 33431 | Licensed in FL, TX, NJ | Equal Housing Opportunity | Not a commitment to lend. Not all will qualify.

Todd Hanley

A Buydown Can Be the Best Closing Credit You Negotiate

Seller concessions don't have to go toward closing costs alone. A temporary rate buydown can save you hundreds per month in Year 1 — and the seller funds it. I help buyers negotiate this into every deal where it makes sense.

— Todd Hanley, Senior Loan Officer | RICP, CMA