See how a temporary buydown lowers the monthly payment year by year, and exactly what it costs to fund, in dollars and as a percentage of the purchase price.
Select Your Buydown Type
Choose how many years you want the reduced rate period to last
Estimates only. Funds needed = for each buydown year, the full note-rate payment minus the reduced-rate payment (principal and interest, rounded to the cent), times 12. Concession required = funds needed ÷ purchase price. Temporary buydown funding sources and concession limits vary by loan program. Qualification is typically based on the full note rate. Not a commitment to lend.
Year-by-Year Payment ScheduleShowing buydown period + years 4 to 5
Year
Interest Rate
Monthly P&I
Total Payment
vs Full Rate
Annual Savings
Monthly Payment Comparison
Visual comparison of your payment at each year's rate vs. the full note rate
How a Temporary Buydown Works
A temporary buydown is a lump sum deposited into an escrow account at closing. That money is used to subsidize your monthly payment during the buydown period, making your effective interest rate lower for those first years.
After the buydown period ends, your payment returns to the full note rate and stays there for the life of the loan. The total cost of the buydown equals the sum of all monthly subsidies across the buydown period.
Buydowns are often used in new construction and in markets where sellers or builders offer concessions, and they can reduce your initial payments without permanently changing your rate.
Important: Temporary buydown funding sources and concession limits vary by loan program. Ask our team how the buydown can be structured for your loan.
This calculator is for illustration and educational purposes only. Results are estimates based on the information you enter and example rates; they are not a loan offer, rate quote, pre-approval, or commitment to lend. Actual rates, payments, terms, and eligibility depend on credit, income, property, program guidelines, and lender approval. Not all borrowers or properties will qualify.