Mortgage Buydown Calculator
Last updated: November 5, 2026
Compare a standard mortgage payment with temporary 2-1 or 1-0 interest-rate buydown payments and estimate the required subsidy.
Estimated temporary buydown cost
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- Standard monthly payment: —
- Year 1 payment: —
- Year 2 payment: —
- Year 1 monthly savings: —
On this page
Quick summary: Compare a standard mortgage payment with temporary 2-1 or 1-0 interest-rate buydown payments and estimate the required subsidy.
Read the complete guide
Updated reference sections in this guide are in English.
What this calculator estimates
Compare a standard mortgage payment with temporary 2-1 or 1-0 interest-rate buydown payments and estimate the required subsidy.
How to use it
Enter Loan amount ($); Note interest rate (%); Loan term (years); Year 1 rate reduction (percentage points); Year 2 rate reduction (percentage points). Select Calculate to update the results.
How the calculation works
The calculator computes principal-and-interest payments at the note rate and at each temporary reduced rate. The estimated subsidy is the sum of the monthly payment differences during the reduced-rate periods.
Worked example: starting scenario
| Loan amount ($) | 400000 |
|---|---|
| Note interest rate (%) | 6.75 |
| Loan term (years) | 30 |
| Year 1 rate reduction (percentage points) | 2 |
| Year 2 rate reduction (percentage points) | 1 |
| Estimated temporary buydown cost | $9,214.85 |
|---|---|
| Standard monthly payment | $2,594.39 |
| Year 1 payment | $2,086.59 |
| Year 2 payment | $2,334.29 |
| Year 1 monthly savings | $507.80 |
Important limitations
Temporary buydown programs vary by lender and may require specific seller, builder or lender funding. Taxes, insurance, mortgage insurance, points and permanent rate changes are not included.
The two-year subsidy window
This scenario prices 12 months at the first reduced rate and 12 months at the second reduced rate, so the total loan term must be at least two years. The subsidy estimate is the sum of the two annual payment differences from the unchanged note-rate payment. It does not reduce the note principal, model an early payoff or determine a lender’s buydown terms.