Rate Buydown
Temporary Rate Buydown Calculator
A temporary buydown uses a funded subsidy to lower your payments for the first 1–3 years. Your mortgage note rate stays the same. Sellers or builders often fund the buydown as a concession. See how each buydown type changes your payment year by year.
Enter your details
The contract rate throughout the loan, including the buydown period
Year 1: −2%, Year 2: −1%
Payment at note rate
$2,594.39
Year after the buydown ends
Year 1 payment
$2,086.59
4.750% rate
Total buydown savings
$9,214.85
Over 2 yrs
Year-by-year schedule
| Year | Rate | Payment | Annual savings |
|---|---|---|---|
| 1 (−2%) | 4.750% | $2,086.59 | $6,093.64 |
| 2 (−1%) | 5.750% | $2,334.29 | $3,121.21 |
| 3 | 6.750% | $2,594.39 | — |
| 4 | 6.750% | $2,594.39 | — |
| 5 | 6.750% | $2,594.39 | — |
| 6 | 6.750% | $2,594.39 | — |
How this is calculated
- A temporary buydown uses funded subsidies to lower your payments for the first 1–3 years. Your mortgage note rate does not change.
- Payments are based on rates below the note rate by these percentage points: 3-2-1 uses 3, then 2, then 1; 2-1 uses 2, then 1; 1-0 uses 1 in year one.
- The buydown cost is roughly the sum of the savings during the reduced years.
- Buydowns are often seller- or builder-funded concessions negotiated in the purchase contract.
- Payments are calculated on the full loan amount and term at each year's effective rate.
Important disclaimer
The figures produced by this calculator are estimates provided for informational and educational purposes only. They are not a commitment to lend, a loan estimate, or a guarantee of any terms, rate, or approval.
Actual costs depend on many factors the tool cannot fully account for, including your specific loan program, the property's location and type, your credit profile, debt-to-income ratio, income documentation, current market interest rates, mortgage insurance requirements, taxes, and insurance premiums.
Interest rates, fees, and program guidelines change frequently. For an accurate quote tailored to your situation, connect with a One Eleven Mortgage loan officer who can review your complete financial picture and provide live, personalized numbers.
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