Mortgage buydown calculator
A temporary buydown can lower your mortgage payment during the first one, two, or three years of your loan — giving you time to ease into your full monthly payment.
See how 3-2-1, 2-1, and 1-year buydowns work, then use our calculator to compare the numbers.
A temporary mortgage buydown is a financing arrangement that temporarily reduces the portion of the mortgage payment paid by the borrower during the first one or more years of the loan.
The mortgage itself still has its normal note rate. A temporary interest rate buydown does not permanently change that rate. Instead, money is contributed to a buydown account at closing. Each month during the temporary period, money from that account helps make up the difference between the reduced payment you make and the full scheduled mortgage payment.
After the temporary buydown period ends, you begin making the full payment based on the mortgage's note rate.
A temporary buydown does not mean the actual mortgage rate changes every year. The mortgage note rate generally remains the same. The temporary buydown subsidizes a portion of the payment during the introductory period.
If the mortgage note rate were 6.50%, the payment the borrower makes would be calculated from the rates below. The note rate itself would still be 6.50%.
Three years of gradually increasing payments before reaching the full note-rate payment.
Two years of reduced payments before reaching the full note-rate payment.
One year of reduced payments before reaching the full note-rate payment.
Availability of each buydown structure depends on the mortgage program, property, transaction, and applicable underwriting guidelines.
Depending on the mortgage program and the transaction, a temporary buydown may potentially be funded by a permitted source. Seller, builder, and other interested-party contributions are subject to that program's contribution limits. Not every source is permitted for every mortgage.
Mortgage insurance is not calculated on this page. If your loan will have mortgage insurance, the housing payment will be higher than the estimate shown here.
Full note-rate principal and interest
per month at for years
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Total subsidy for this structure: Loan Percentage:
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Ryan Minick and Steve DeLon can walk through whether a temporary buydown fits the loan, the property, and the way the purchase is structured.