A temporary or permanent buydown can reduce your buyer’s monthly mortgage payments.This may be more attractive to some buyers than simply cutting your price.
Select your options for an estimate of what kind of cash it’ll take for a permanent buydown.

Rate Buydown Calculator

Selling Price $300,000

Loan Amount $285,000

Interest Rate 7.500%

Buy Down Interest Rate 6.500%

Loan Term

Buydown Fee

Calculating...

A seller can offer any buydown amount, for any duration of time, in order to make the offer optimally attractive to a buyer. However, a permanent buydown, while less sexy, might be viewed as the most ethical, depending on your buyer’s needs. NOTE: this calculator estimates P&I only. It does not include taxes, insurance, HOA or other possible costs.

For Reference, here are a few common strategies:

1/0 buydown: The interest rate is reduced by 1% for the first year only, then returns to the original note rate for the remainder of the loan.
1/1 buydown: The rate is reduced by 1% in year one and remains 1% below the note rate for year two, then resets to the full note rate afterward.
2/1 buydown: The rate is reduced by 2% in the first year, 1% in the second year, and then increases to the full note rate starting in year three.
3/2/1 buydown: The rate is reduced by 3% in year one, 2% in year two, 1% in year three, and then adjusts to the full note rate in year four.
Permanent buydown: The borrower or seller pays upfront points at closing to permanently lower the interest rate for the entire life of the loan.

Here is a calculator using some non-permanent strategies [for just P&I, click “Advanced” and reduce taxes & insurance to zero].

The information and results provided by this calculator are for illustrative purposes only and should not be considered financial, legal, or tax advice. This self-help tool is designed for independent use and is not intended to provide investment advice. Actual loan terms, rates, fees, and buydown costs may vary based on lender requirements, borrower qualifications, market conditions, and other factors. We cannot and do not guarantee the applicability or accuracy of these calculations. In any and all regards to your individual financial circumstances, we strongly recommend you consult with a qualified mortgage professional, financial advisor, or attorney before making any financing decisions.