Buydown Calculator
Rate Buydown Calculator
Compare a 2-1 temporary buydown against permanent discount points and see what each one does to your monthly principal and interest, and what it costs to get there.
Estimated principal and interest
No buydown
6.75 percent
$2,594
Year 1
4.75 percent
$2,087
Year 2
5.75 percent
$2,334
Year 3 onward
6.75 percent
$2,594
Total buydown cost
$9,215
Year 1 monthly savings
$508
Estimate only. Principal and interest on a 30 year fixed loan. Excludes property taxes, insurance, HOA, and mortgage insurance. Actual buydown cost and rate reduction depend on your lender, loan type, credit, and the day's pricing. Raven Mok is a real estate agent, not a lender. Confirm all figures with a licensed loan officer.
Why a buydown often beats a price cut+
Most buyers negotiate the price and never ask about the rate. On the same house, the same dollars applied to a rate buydown usually move the monthly payment several times more than a price reduction of equal size.
A 2-1 temporary buydown lowers the rate by 2 points in year one and 1 point in year two, then returns to the note rate. Permanent discount points lower the rate for the life of the loan. Which one fits depends on how long you plan to stay and whether you expect to refinance.
Sellers and builders often prefer a buydown to a price cut because their recorded sale price stays intact, which protects the comps. That is why builders in Prosper, Celina, and Frisco lead with financing incentives.
This calculator is an estimate of principal and interest only. It excludes taxes, insurance, HOA, and mortgage insurance. Raven Mok is a real estate agent, not a lender. Confirm every figure with a licensed loan officer.