🧮 FREE CALCULATOR — UPDATED JULY 2026

Mortgage Buydown Calculator: 2-1 & 3-2-1 Seller-Paid Savings

Calculate your exact monthly savings with a seller-paid rate buydown. On a $400K loan at 6.5%, a 2-1 buydown saves $501/month in Year 1. See Year 1, 2, and 3 payments instantly. Free, no email, no signup.

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A 2-1 buydown on a $400K loan at 6.5% saves $501/month in Year 1 (rate drops to 4.5%, payment = $2,027 vs $2,528). Year 2 saves $257/month (rate = 5.5%). The seller pays ~$9,000 at closing to fund the buydown escrow. A 3-2-1 buydown saves $732/month in Year 1 (rate = 3.5%). Use the calculator below for your exact numbers.

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Current 30-year fixed: ~6.5% (July 2026)

Your Buydown Results

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Enter your loan details and click "Calculate" to see your year-by-year savings.

How a Mortgage Buydown Works

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1. Seller Pays Upfront

The seller or builder funds a buydown escrow account at closing. This is a negotiation concession — it costs you nothing.

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2. You Save Monthly

Your rate is temporarily reduced for 2-3 years. On a $400K loan, a 2-1 buydown saves $500+/mo in Year 1 — real cash in your pocket.

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3. Refinance Later

After the buydown period, if rates dropped, refinance to lock a lower permanent rate. If not, continue at the note rate. Win-win.

2-1 vs 3-2-1 Buydown Comparison

Feature2-1 Buydown3-2-1 Buydown
Year 1 Rate Reduction2% off3% off
Year 2 Rate Reduction1% off2% off
Year 3 Rate Reduction0% (full rate)1% off
Year 4+ RateFull note rateFull note rate
Seller Cost ($400K @ 6.5%)~$9,000~$21,500
Year 1 Savings ($400K)$501/mo$732/mo
Total Savings~$9,000~$21,500
Best ForBudget-conscious buyersMax Year 1 savings
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Mortgage Buydown FAQ

What is a 2-1 buydown on a mortgage?
A 2-1 buydown reduces your rate by 2% in Year 1 and 1% in Year 2, then returns to the full note rate in Year 3. On a $400K loan at 6.5%: Year 1 = 4.5% ($2,027/mo vs $2,528), Year 2 = 5.5% ($2,271), Year 3+ = 6.5% ($2,528). The seller pays the difference at closing.
What is a 3-2-1 buydown?
A 3-2-1 buydown reduces your rate by 3% Yr 1, 2% Yr 2, 1% Yr 3, then full rate in Yr 4. On $400K at 6.5%: Yr 1 = 3.5% ($1,796/mo, saving $732/mo). Total savings ~$21,500. The seller pays this as a concession.
Who pays for a mortgage buydown?
The seller, builder, or lender pays. It is funded as a lump sum at closing in a buydown escrow account. On a $400K loan with a 2-1 buydown at 6.5%, the seller pays ~$9,000-$10,000. Negotiate this into your purchase offer.
Is a buydown better than a price reduction?
Often yes. A $10K price reduction saves ~$60/mo over 30 years. A $10K seller-paid 2-1 buydown saves $500+/mo in Year 1 — immediate cash when you need it most. Plus you can refinance after the buydown period.
Can I refinance after a buydown?
Yes. If rates drop during your buydown period, refinance to lock a lower permanent rate. If not, continue at the note rate. Many buyers use buydowns as a rate bridge expecting to refinance when the Fed cuts rates.
How much does a 2-1 buydown cost the seller?
On a $400K loan at 6.5%, a 2-1 buydown costs the seller approximately $9,000-$10,000. This covers the payment difference between the reduced rate and the note rate for Years 1 and 2. The funds are deposited into a buydown escrow account at closing.
What is the difference between a buydown and mortgage points?
Mortgage points permanently lower your rate for the life of the loan — 1 point = 1% of loan amount = ~0.25% rate reduction. A buydown temporarily lowers your rate for 2-3 years only. Points are paid by the buyer; buydowns are typically paid by the seller.
Are buydowns allowed on FHA and VA loans?
Yes. FHA allows 2-1 and 3-2-1 buydowns on fixed-rate loans. VA allows temporary buydowns with seller funding. Both have specific rules: FHA requires the buydown to be disclosed in the Loan Estimate, and VA requires the seller to fund the buydown escrow.

Related Calculators & Guides

← All Free Mortgage CalculatorsMortgage Payment Calculator →Refinance Break-Even Calculator →Mortgage Points Calculator →When to Refinance Your Mortgage →Max Seller Concessions Guide →

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