Mortgage Rate Buydown Calculator
See how much a temporary 1-0, 2-1, or 3-2-1 buydown lowers your payment — and what it costs upfront
Loan Details
Your payment starts low, then climbs to normal. Year 1 is always the cheapest, and it steps up a little each year until you pay the regular amount.
The name is the discount. “2-1” means 2% off your rate in year 1, 1% off your rate in year 2, then the normal rate from year 3 on.
Total Buydown Cost
$11,380
Funded upfront at closing — often paid by the seller or builder
Year-by-Year Payment
Year 1 saves $7,523 vs. the full payment.
Good to know: You still qualify at the full 6.5% rate — a buydown lowers your early payments, not how much you can borrow. Want a permanently lower rate instead? Compare buydowns vs. points.
No-obligation quote • No credit impact
How to use this buydown calculator
- Enter your loan amount and note rate (the regular rate on your loan).
- Choose your loan term and a buydown type — 1-0, 2-1, or 3-2-1.
- See your year-by-year payment, the monthly savings, and the total upfront cost the seller, builder, or you would fund at closing.
A mortgage rate buydown lowers your interest rate so your monthly payment starts lower. A temporary buydown (1-0, 2-1, or 3-2-1) reduces your rate for the first one to three years, then it returns to the full note rate. Want a lower rate for the life of the loan instead? That’s a permanent buydown using discount points — read our full guide to mortgage rate buydowns.
Buydown calculator FAQ
What is a mortgage rate buydown?
A rate buydown is when money is paid upfront to lower your mortgage interest rate. A temporary buydown (like a 2-1) lowers your rate for the first year or two, then it returns to the full note rate. A permanent buydown (discount points) lowers your rate for the life of the loan.
How does a 2-1 buydown work?
With a 2-1 buydown, your interest rate is 2% lower in year one and 1% lower in year two, then it rises to the full note rate from year three on. Your monthly payment starts low and steps up to the normal amount.
How much does a 2-1 buydown cost?
The cost equals the total payment savings over the buydown period, funded upfront at closing. For example, a 2-1 buydown on a $500,000 loan at 6.5% costs about $11,376. Use the calculator above to see the cost for your exact loan amount and rate.
Who pays for a mortgage rate buydown?
It's most often paid by the seller or home builder as an incentive, but a buyer can pay for it too. Sellers like buydowns because they lower your payment more than an equivalent price cut would.
What is the difference between a 1-0, 2-1, and 3-2-1 buydown?
The numbers are how many percentage points your rate drops each year. A 1-0 lowers your rate 1% in year one only. A 2-1 lowers it 2% in year one and 1% in year two. A 3-2-1 lowers it 3%, then 2%, then 1% over the first three years.
Do I qualify at the lower buydown rate?
No. Lenders qualify you at the full note rate, not the temporary bought-down rate. A buydown lowers your early payments — it does not increase how much home you can afford.
What happens to the buydown if I refinance or sell early?
Any unused buydown funds held in escrow are applied to your loan balance. You don't lose the remaining money, but it isn't refunded to you in cash.