Buydown Calculator
Compare temporary and permanent buydowns side by side. See what each option costs, what you save, and which one makes sense for how long you plan to keep the loan.
Base Monthly Payment (no buydown)
$3,242.99
$500,000 at 6.750% for 30 years
Temporary 2-1 Buydown
Lower payments for the first 2 years, then full rate
Total Year 1 savings: $7,617
Total Year 2 savings: $3,902
Usually paid by the seller or builder as a concession. You get lower payments for 2 years with no long-term rate change.
Refi opportunity: If rates drop below 6.000% during year 1 or 2, refinancing could lock in permanent savings. The buydown gives you breathing room while you wait for rates to improve.
Permanent Buydown (1 Point)
Pay upfront to lower your rate for the life of the loan
After 61 months, the savings exceed the upfront cost. Over the full 30-year term, you would save $24,754 net.
Keep in mind: If you refinance or sell before 61 months, you won't fully recover the point cost. Best for buyers who plan to hold the loan long-term.
Which buydown is right for you?
Temporary 2-1 Buydown
Costs $11,519 and saves $11,519 over the first 2 years. After that, your payment goes to the full rate.
- Great when seller/builder covers the cost
- Buys time to refinance if rates drop
- Easier to qualify at the lower Year 1 payment
Permanent Buydown (1 Point)
Costs $5,000 upfront and saves $82.65/mo for the life of the loan. Breaks even in 61 months.
- Best if you plan to keep the loan 6+ years
- Permanent rate reduction, not temporary
- Net savings over full term: $24,754
Bottom line: The permanent buydown costs less upfront ($5,000 vs $11,519) and delivers savings for the life of the loan. The temporary buydown gives you bigger immediate relief but only lasts 2 years.
Want to see what a buydown looks like on your actual deal?
I can run the numbers with real rates and show you exactly what each option costs. Reach out and I'll put a comparison together for you.