Temporary Rate Buydown Calculator

See exactly how a 3/2/1, 2/1, 1/1, or 1/0 buydown lowers your payment — and what it costs the seller.

3/2/1 & 2/1 Buydowns Full Amortization Schedule Seller Credit Analysis Shareable URL
Full Note Rate
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—/mo
Year 1 Rate
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—/mo
Mo. Savings Yr 1
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vs. full payment
Total Subsidy Cost
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Required seller deposit
Seller Credit Balance
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After funding buydown

Year-by-Year Comparison

Year Rate Payment Mo. Savings Subsidy Used
Enter loan details above.

Payment & Subsidy Charts

Monthly Payment Over Time (First 36 Months)

Annual Subsidy by Year

Full Amortization Schedule

Shaded rows show buydown period. Subsidy column reflects monthly draw from seller escrow.

# Date Rate Payment Principal Interest Subsidy Balance
Enter loan details above.

How Temporary Buydowns Work

The seller deposits a lump sum at closing. You pay less each month. Here's the mechanics.

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Seller Funds an Escrow at Closing

The seller (or builder) deposits a lump sum into a custodial escrow account at closing. That deposit equals the total payment difference across all buydown years — calculated before you sign.

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You Pay the Reduced Rate Each Month

During the buydown period you make a lower monthly payment. The escrow releases the difference to the lender every month to make up the full P&I amount. Your loan still amortizes at the full note rate.

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Rate Steps Up on Schedule

A 2/1 buydown: rate is 2% below note rate in Year 1, 1% below in Year 2, then full note rate from Year 3 forward. The schedule is fixed — no surprises, no adjustable-rate risk.

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Leftover Funds Reduce Your Principal

If you sell or refinance before the buydown period ends, any remaining escrow balance is applied as a principal paydown at closing. This is a key advantage over simply taking a lower purchase price.

Buydown FAQs

Ready to Run the Numbers on a Real Scenario?

Send the purchase price, loan amount, seller credit, and target payment. I'll show you whether a buydown beats a price reduction before you write it into the offer.

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