Check out how much you can save using our Rate Buydown Mortgage Calculator…

The results provided by this mortgage calculator are for informational and illustrative purposes only. They do not constitute a commitment to lend or an offer of credit. Actual loan terms, interest rates, and monthly payments may vary based on factors such as credit profile, loan product, property location, and other considerations. All estimates are subject to underwriting approval and may not include additional costs. Borrowers should carefully review their financial situation and consult with a licensed mortgage professional before making any loan decisions.

Buydown Type

3/2/1 Buydown 2/1 Buydown 1/1 Buydown 1/0 Buydown

Purchase Price

$100,000 $2 Million

Down Payment

0% 80%

Base Interest Rate

0% 20%

Loan Term

10 year fixed 15 year fixed 20 year fixed 30 year fixed

Advanced (optional)

Include Taxes & Insurance?

Annual Property Tax

0% 5%

Annual Homeowners Insurance

0% 15%

HOA Dues

$ /month

The total buydown fee for this loan is $ The buydown fee is the cost of lowering your interest rate for the first few years of your loan. This is usually paid by the seller and passed on to the buyer as savings in the form of a lower interest rate.

Yearly Mortgage payments breakdown:

Buyer Savings:

Year	Interest rate	Payment	New payment	Monthly savings	Annual savings
Year 1	3.25%	$2,462.87	$1,740.83	$722.04	$8,664.48
Year 2	4.25%	$2,462.87	$1,967.76	$495.11	$5,941.32
Year 3	5.25%	$2,462.87	$2,208.81	$254.06	$3,048.72
3/2/1 Buydown Cost (Seller Paid)					$17,654.52

Year 1

3.25%

Original Payment $2,462.87

New Payment $1,740.83

Monthly Savings $722.04

Annual Savings $8,664.48

Estimated Taxes & Insurance Property taxes are generally estimated to be 1.2% of the home's value, but may vary based on your location. Annual homeowners insurance is roughly 0.35% of the home's value but can change based on insurer. Your loan specialist can help you determine property tax and insurance rates in your area.

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Estimated Buyer Savings $

Loan amount

Down payment

Base Interest rate

Loan term

Taxes & insurance included?

Property tax

Homeowner's insurance

HOA dues

Payment Breakdown By Year

Amortization

Amortization Schedule Breakdown

Our detailed amortization schedule breaks down your mortgage payments, showing how they are split between interest and principal over the life of your loan. Note: The actual monthly payment may be higher than what is shown here, as this schedule does not account for variable costs such as property taxes and home insurance, which are often included in your total mortgage payment.

Principal payments: $ (the amount borrowed)
Interest payments: $ (the cost of borrowing)

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Rate Buydown Mortgage Calculator

The Rate Buydown Mortgage Calculator is a powerful tool designed to help potential homebuyers understand how they can save on their mortgage payments by lowering their interest rate. By inputting key variables such as purchase price, down payment, and loan term, users can easily see the financial benefits of opting for a rate buydown.

This calculator not only provides a clear estimate of monthly payments but also breaks down the total savings over the life of the loan. It allows users to visualize their savings year by year, making it an essential resource for anyone considering a mortgage with a buydown option.

Understanding the Buydown Fee

The buydown fee is a one-time cost that homebuyers pay to reduce their mortgage interest rate for a specified period. This fee can significantly impact monthly payments, allowing buyers to enjoy lower costs in the initial years of their loan. Understanding this fee is crucial for making informed financial decisions.

For example, a 3-2-1 buydown allows borrowers to pay a lower interest rate for the first three years, gradually increasing to the original rate. This structured payment plan can lead to substantial savings, particularly for buyers who anticipate an increase in income or plan to refinance in the near future.

Benefits of Using a Rate Buydown

Utilizing a rate buydown can provide several advantages for homebuyers. The most significant benefit is the immediate reduction in monthly mortgage payments, which can free up cash for other expenses or investments. This strategy can be particularly appealing for first-time homebuyers or those on a tight budget.

Additionally, a lower interest rate can lead to considerable savings over the life of the loan, making homeownership more affordable. Buyers can also benefit from the increased purchasing power, allowing them to consider homes in higher price ranges while maintaining manageable monthly payments.

How to Use the Rate Buydown Calculator

Using the Rate Buydown Mortgage Calculator is straightforward. Users simply enter their loan details, including the purchase price, down payment, interest rate, and loan term. The calculator will then generate an estimate of the monthly payments and total savings based on the selected buydown option.