Temporary Buydown Calculator — 1/1, 2/1 & 3/2/1 Buydowns
Calculate the exact seller credit needed for temporary mortgage rate buydowns. Compare 1/1, 2/1, and 3/2/1 buydown structures to see how much a seller needs to contribute to reduce your interest rate in the early years of your loan.
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How Temporary Buydowns Work
A temporary buydown reduces your mortgage interest rate for the first 1–3 years of the loan. The seller (or builder) contributes a lump sum at closing that subsidizes your payments during the buydown period. After the buydown expires, your rate returns to the permanent note rate. This is different from buying discount points, which permanently reduce your rate.
Common structures: A 2/1 buydown reduces your rate by 2% in Year 1 and 1% in Year 2. A 3/2/1 reduces by 3%, 2%, and 1% over three years. The seller credit required equals the total payment difference over the buydown period.
Estimates are for education only. They are not a loan offer or a commitment to lend. Rates are examples, not quotes. Verify any scenario with a licensed loan officer. Jay Miller, Sales Manager and Certified Mortgage Advisor, NMLS #657301. CMG Home Loans Branch NMLS #2475890, 500 Ala Moana Blvd, Suite 5-325, Honolulu, HI 96813. CMG Mortgage, Inc. NMLS #1820. Equal Housing Opportunity.