Mortgage Rate Buydown Calculator
Price out a temporary buydown or permanent discount points, and see the payment schedule, the cost, and when the savings break even.
Cost of the buydown
$9,323
The subsidy that covers the payment gap — often paid by the seller or builder as a concession
| Year | Rate | Payment | Savings / mo |
|---|---|---|---|
| Year 1 | 5% | $2,147 | $514 |
| Year 2 | 6% | $2,398 | $263 |
| Year 3+ | 7% | $2,661 | — |
Lenders typically qualify the buyer at the full note rate, and the payment steps up each year until it reaches $2,661 in year 3.
How it works
The math behind the numbers
- Temporary buydowns reduce the rate by the stated steps in the early years; the cost is the total payment gap versus the note rate.
- Permanent points cost 1% of the loan each and lower the rate for the full term by the reduction per point you enter.
- Break-even is the cost of the points divided by the monthly savings. Pricing varies by lender.
These estimates are for educational purposes and aren't financial, lending, or tax advice. Actual rates, costs, and loan terms vary — confirm the numbers with a licensed lender, title company, or tax professional before making decisions.
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