Calculators
Temporary Rate Buydown Builder
Compare 2-1, 1-1, and 1-0 temporary rate buydowns: payments by year, savings, and the seller or agent contribution required.
Choose a buydown structure
The largest reduction isn't automatically the best choice — compare the upfront cost and the payment after the buydown ends.
Scenario inputs
Monthly housing costs (optional)
Funding the buydown
Optional
Your payment timeline
2-1 Buydown · Loan amount $379,050 · Note rate 6.500%
Year 1
$1,921/mo
Principal & interest at 4.500% payment rate
Saves $475.26/mo
Year 2
$2,152/mo
Principal & interest at 5.500% payment rate
Saves $243.65/mo
Year 3+
$2,396/mo
Principal & interest at 6.500% payment rate
Estimated APR?
6.500% Estimated APR
Estimated APR is provided for informational purposes only. Actual APR may vary based on lender terms, fees, credit profile, and other factors.
Estimated total housing payment (Year 1)
$1,920.59
P&I $1,920.59 + taxes $0 + insurance $0 + MI $0
Required buydown funding?
Estimated seller/agent-funded subsidy for the selected option.
Estimated subsidy
$8,626.95
Seller contribution
$8,626.95
Agent contribution
$0.00
Funding shortfall
$0.00
2.16% of the purchase price. Interested-party contribution limits, program rules, and lender approval apply before any amount can be considered permissible. The exact amount must match the lender's buydown agreement.
Compare all three
| Option | Year 1 | Year 2 | After buydown | Subsidy | Est. APR |
|---|---|---|---|---|---|
| ✓ 2-1 Buydown | $1,920.59 | $2,152.20 | $2,395.85 | $8,626.95 | 6.500% |
| 1-1 Buydown | $2,152.20 | $2,152.20 | $2,395.85 | $5,847.59 | 6.500% |
| 1-0 Buydown | $2,152.20 | $2,395.85 | $2,395.85 | $2,923.80 | 6.500% |
Principal and interest only. Same Estimated APR for each option because the seller-funded subsidy doesn't change the note terms.
Shareable summary
Temporary Rate Buydown
2-1 Buydown Strategy
Client Scenario Template
NMLS #2004342
Powered by Edge Home Finance, LLC
Year 1
Rate
4.500%
Payment
$1,920.59
Monthly savings
$475.26
Year 2
Rate
5.500%
Payment
$2,152.20
Monthly savings
$243.65
Year 3+
Rate
6.500%
Payment
$2,395.85
2-1 Buydown Detail
| Year 1 rate / payment | 4.500% · $1,920.59 |
| Year 2 rate / payment | 5.500% · $2,152.20 |
| Year 3+ rate / payment | 6.500% · $2,395.85 |
| Year 1 annual savings | $5,703.16 |
| Year 2 annual savings | $2,923.80 |
| Total buydown cost | $8,626.95 |
| Seller concession required | $8,626.95 |
| Concession % of price | 2.16% |
Why It Matters
Seller dollars used toward a temporary buydown can create significantly more early-payment relief than a simple price reduction.
Estimated APR is provided for informational purposes only. Actual APR may vary based on lender terms, fees, credit profile, and other factors. The temporary payment rate is not the note rate or the APR. For educational purposes only. Not an offer to extend credit or a commitment to lend. All loan scenarios are subject to borrower qualification, underwriting approval, and program availability.
Nathan Williams, Mortgage Loan Originator, NMLS #2004342
Edge Home Finance, LLC
NMLS #891464 · www.nmlsconsumeraccess.org · Equal Housing Opportunity
Edge Home Finance, LLC is a mortgage broker, not a direct lender or creditor. Licensed in 49 states and the District of Columbia; not licensed in New York.
How This Tool Works
How a 2-1 Temporary Buydown Is Calculated
In a 2-1 buydown, the payment is based on a rate 2 points lower in year one and 1 point lower in year two, then returns to the note rate from year three onward.
What the inputs mean
Purchase price and down payment set the loan amount. The starting note rate is the permanent rate. Optional mortgage insurance and escrow amounts are added to each year's payment so the figures reflect a fuller monthly cost.
How to read the results
The total buydown cost is the sum of the monthly payment savings in years one and two. That amount is typically funded upfront, often through a seller concession, which is shown as a dollar amount and a percentage of the price. Estimated APR folds lender fees, discount points, and other prepaid finance charges into a single yearly cost figure, so it is usually a little higher than the note rate. Use it to compare scenarios, not as a quoted rate.
What to keep in mind
You still need to qualify at the note rate, and the payment rises in years two and three. Concession limits depend on the loan program.