Buydown Cost Estimator | Jonathan Wilson - Home Loans Made Awesome

Buydown Cost Estimator | Jonathan Wilson - Home Loans Made Awesome

Estimate the cost of a 3-2-1, 2-1, 1-1, or 1-0 mortgage rate buydown. A free tool for Realtors from Jonathan Wilson, Home Loans Made Awesome.

What does a rate buydown really cost?

How to talk about this with your buyers

Good to know: seller concessions have a ceiling

Frequently Asked Questions

Want me to run your actual scenario?

LOAN PROGRAMS

Plug in a loan amount, rate, and term to see exactly what a 3-2-1, 2-1, 1-1, or 1-0 buydown costs — and how much your buyer's payment drops in year one. Great for showing sellers why offering a buydown can help a home sell faster.

Regular principal & interest at the note rate: /mo. Each plan compares that payment with the lower buydown payment.

Best practice: Check with the lender on what the borrower's rate would actually be before you quote a buydown, and estimate a little higher than today's rate to allow for market volatility. Rates can worsen between the first conversation and a signed contract, and a fee calculated on a lower rate can come up short once the buyer is under contract.

-year rate step-down

Total buydown cost

A temporary buydown lowers your buyer's interest rate for the first year or two of the loan, easing them into their full payment while rates (or their income) catch up. The numbers above show the actual dollars it takes to fund that discount — money that's often negotiated as a seller concession or credit rather than paid out of pocket.

The 3-2-1 and 2-1 options step the rate up gradually, while the 1-1 keeps a flat discount for two years , and the 1-0 is the simplest — one year of relief, then straight to the note rate. There's no single best option; it comes down to what a seller is willing to credit and how much cushion your buyer wants in year one.

Have a buyer who wants to see this run with their real numbers? Send them my way — happy to walk through it together.

A buydown is usually funded as a seller concession — but every loan program caps how much a seller can contribute, based on the down payment (LTV) and property type.

*VA allows the seller to pay all standard closing costs and discount points on top of this 4%, which is reserved for other concessions (like a temporary buydown, debt payoff, or a home warranty).

These caps are general guidelines and can vary by investor, credit score, and loan-level pricing adjustments — and program rules do change. Always confirm the exact cap for your buyer's specific scenario with me before writing it into an offer.

Estimates only, for discussion purposes. Confirm the borrower's rate with the lender and estimate a little higher to allow for market volatility — a fee calculated today can come up short if rates are worse by the time they are under contract. Actual buydown costs are set by the loan program and investor guidelines at time of lock. Not a commitment to lend. Equal Housing Lender. Licensed in AL, FL, GA, HI, KY, ME & TN.