Mortgage Buydown Calculator

Mortgage Buydown Guide

A temporary buydown lowers your interest rate for the initial 1 to 3 years using an upfront escrow subsidy paid by the home seller or builder.

Formula

Monthly Payment = PMT(Reduced Rate / 12, Term Months, -Loan Amount)

Frequently Asked Questions

How does a 2-1 buydown work?

Your rate is 2% below note rate in year 1, 1% below in year 2, and returns to full note rate in year 3.

Who pays the buydown subsidy?

In most home purchases, the seller or builder deposits the total payment difference into an escrow account at closing.