Calculator
Temporary Buydown Calculator
Model a 3-2-1, 2-1, 1-1 or 1-0 buydown and its subsidy cost.
Estimated buydown cost (subsidy)
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Estimates only, based on the numbers you enter. Not a Loan Estimate, rate quote, offer or commitment to lend. Actual terms depend on credit, property, program and market conditions.
How temporary buydowns work
Someone, often a seller, builder or lender where allowed, funds an account up front that covers part of your payment for the first year or years. The subsidy cost is the total monthly savings over the buydown period.
Important
Under Fannie Mae's guidelines, you qualify at the full note rate, not the reduced rate. Temporary buydowns are limited to primary residences and second homes, and interested-party contribution limits apply. Read how rate buydowns work.
Common questions
Who pays for a temporary buydown?
Usually a seller or builder funds it as a concession, and sometimes a lender does where allowed. The cost is the total of the monthly payment reductions during the buydown years, deposited at closing.
Do I qualify at the lower buydown rate?
For Fannie Mae loans, no. You qualify at the full note rate. Other programs have their own rules, so check before you count on the lower payment.
What's the difference between a 2-1 and a 1-0 buydown?
A 2-1 buydown lowers the rate by 2 points in year one and 1 point in year two. A 1-0 lowers it by 1 point for year one only. After the buydown period, the payment goes to the full note rate for the rest of the loan.
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