Temporary Buydown Calculator
See exactly how a seller-paid buydown reduces your monthly payment — year by year — and what it costs to fund it.
Select Your Buydown Type
Choose how many years you want the reduced rate period to last
Loan Details
Enter your loan amount, rate, and term
Buydown Summary
Total savings & cost to fund
| Year | Interest Rate | Monthly P&I | Total Payment | vs Full Rate | Annual Savings |
|---|---|---|---|---|---|
How a Temporary Buydown Works
A temporary buydown is a lump sum — usually paid by the seller or builder — 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 especially popular in buyer's markets, new construction, and rate environments where sellers need to offer concessions. They can be negotiated as part of your purchase offer — making it a powerful tool to reduce your initial payments without permanently changing your rate.
Important: The buydown cost must be paid by the seller, builder, lender, or a third party — not by the borrower as an upfront payment. Ask your loan officer how to structure this in your purchase contract.