Mortgage Buydown Calculator: 3-2-1, 2-1 and 1-0
Free Calculator · Home Buyers
See how a temporary 3-2-1, 2-1 or 1-0 buydown lowers your payment in the first years of the loan, what it costs, and whether the seller's or builder's contribution is enough to cover it.
How this calculator works
A 3-2-1 buydown lowers the rate by 3% in year 1, 2% in year 2 and 1% in year 3, then the loan pays at its note rate.
Each year's payment is the standard payment at that year's reduced rate.
Buydown cost = the difference between the note-rate payment and each reduced payment, times 12 months, added up across the buydown years.
Contribution = loan amount × the seller or third-party contribution %.
Buydown questions
How much does a 3-2-1 buydown cost?
On a $250,000, 30-year loan at 7%, a 3-2-1 buydown costs about $11,464. Year 1 is paid at 4% (about $1,194 a month), year 2 at 5%, year 3 at 6%, and years 4–30 at 7% (about $1,663).
Who pays for a temporary buydown?
Usually the seller or builder, as a concession, though a buyer can pay it too. The funds are held and used to cover the lower payments in the early years.
Do I qualify at the lower rate?
Usually not. With a temporary buydown, lenders typically qualify you at the full note rate, so make sure the year-4 payment fits your budget.
Negotiating a seller credit?
We'll show you whether a buydown or a lower price saves you more.
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