Calculate Mortgage Buydown Costs Instantly

Our free mortgage buydown calculator helps you determine the exact cost of temporary rate buydowns including 3-2-1, 2-1, and 1-0 buydown structures. Get accurate monthly payment reductions and total buydown costs for informed home buying decisions.

Loan Details
Enter the principal loan amount in dollars
Annual interest rate percentage (e.g., 7.00 for 7%)
Standard loan term for payment calculation
Buydown Options
Select Buydown Structures to Analyze
Multiple buydown types can be calculated simultaneously for comparison

Buydown Analysis Results

Understanding Mortgage Buydowns

A mortgage buydown is a financing technique that allows homebuyers to secure a lower interest rate for the first few years of their mortgage. The most common temporary buydown structures are:

3-2-1 Buydown

The 3-2-1 buydown reduces your interest rate by 3% in the first year, 2% in the second year, and 1% in the third year. This provides significant monthly payment savings during the early years of homeownership.

2-1 Buydown

A 2-1 buydown offers a 2% rate reduction in year one and 1% reduction in year two, providing two years of lower payments before transitioning to the full note rate.

1-0 Buydown

The simplest buydown structure, offering a 1% rate reduction for the first year only, making it the most affordable buydown option.

How Buydown Costs Are Calculated

Buydown costs are calculated by determining the difference between the full monthly payment and the reduced monthly payment during each buydown year. The total cost is the sum of all annual savings required to fund the temporary rate reduction.