You get a lower payment, for now.
Temporary buydowns drop your rate for the first one, two, or three years. Pick a structure and see what you'd actually pay each year.
The deal
Each number is the rate reduction (in %) for that year.
Note rate payment
$3,160.34
Year 1 payment
$2,533.43
At 4.500%
Year 1 monthly savings
$627
Total buydown cost
$11,380
Typically paid by seller or builder
Year-by-year breakdown
Payments during buydown years vs. the note rate payment of $3,160.34/mo.
| Year | Rate | Payment | Monthly savings | Annual savings |
|---|---|---|---|---|
| 1 | 4.500% | $2,533.43 | $627 | $7,523 |
| 2 | 5.500% | $2,838.95 | $321 | $3,857 |
| 3Note rate | 6.500% | $3,160.34 | — | — |
| 4 | 6.500% | $3,160.34 | — | — |
| 5 | 6.500% | $3,160.34 | — | — |
How a temporary buydown actually works
A temporary buydown allows you to enjoy a lower rate for the first one, two, or three years of the loan. Your note rate doesn't change, the rate you actually pay does, and it steps back up each year until it hits the note rate. It's a useful tool to keep the monthly payment lower for the first couple of years. Talk to us before you assume the math works.
Want a real human to run the numbers?
Calculators give you a starting point. We'll give you the actual rate, the actual payment, and the honest answer about whether the move makes sense.
Start a free pre-approval