Mortgage Buydown Calculator

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Compare Temporary Buydowns

How Does a Temporary Buydown Work?

A 3-2-1 buydown reduces the effective payment rate by 3 percentage points in year one, 2 in year two, and 1 in year three. A 2-1 buydown reduces it by 2 points in year one and 1 in year two. A 1-0 buydown reduces it by 1 point in year one only. The monthly payment then returns to the full note-rate amount.

The subsidy is generally funded at closing by an eligible contributor, subject to loan program and lender restrictions. Borrowers typically must qualify at the full note rate. This tool estimates principal and interest only; it does not include property taxes, homeowners insurance, mortgage insurance, HOA dues, or closing costs.

Illustrations only, not a loan offer or a guarantee of financing. Actual eligibility, subsidy amounts, and lender calculations may differ. Rate reductions are percentage-point reductions from the note rate; calculations use the original loan amount and term at each temporary effective rate to estimate the subsidized payment. Consult your lender for a formal quote.