Temporary Buydown

A temporary buydown reduces your interest rate for the first 1–3 years of the loan, lowering your monthly mortgage payments during that period. The most common structure is a 2-1 buydown.

Enter your full loan amount, loan term, standard interest rate, and the buydown terms (e.g., 2-1 or 1-0). The calculator shows your adjusted monthly payments during each year of the buydown and compares them to the normal payment.

A 2-1 buydown means your interest rate is reduced by 2% in the first year and 1% in the second year. In year 3, your payment adjusts to the full interest rate for the remainder of the loan.

The cost is usually covered by the seller or lender as a credit at closing. This upfront cost makes up for the lower monthly payments during the first years of the loan.

Yes. Even though your initial payments are lower, you must qualify based on the full interest rate (not the temporarily reduced one). This calculator helps you plan for the long-term payment.

Yes. Use the total monthly savings shown by the calculator to decide whether a seller-paid buydown or a lower home price would offer greater long-term benefit.

No. This calculator focuses on principal and interest only. If you want a full monthly payment including property taxes and insurance, use a PITI calculator.