Rate Buydown Calculator: 3-2-1, 2-1 and 1-1 vs. Permanent
See what each temporary buydown costs, what your full payment looks like every year, and whether the same seller concession works harder as a permanent rate buydown. Then turn it into a presentation you can send as a link or PDF.
Your scenario
Change any number. Everything updates instantly.
Monthly payment by year
Principal, interest, taxes, insurance, mortgage insurance and HOA.
Side by side
What each option costs to set up, what you bring to closing, and what you pay each year.
Temporary vs. permanent over time
Cumulative dollars ahead of (or behind) the plain 30-year fixed, counting cash to close plus every payment. Above zero means you are ahead.
Build the presentation
Add names, then open it, share the link, or save it as a PDF. The link carries every number above, so whoever opens it sees the exact same deck.
PDF tip: in the print window choose "Save as PDF", Landscape, Margins: None, and turn on Background graphics.
Buydown questions buyers ask
What is a 2-1 buydown?
Your rate starts 2% below the note rate in year one, 1% below in year two, and sits at the full note rate from year three on. The seller, builder or another party deposits the payment difference into an account at closing, and that account covers the gap each month.
How is a 3-2-1 or 1-1 different?
A 3-2-1 starts 3% below the note rate and steps up 1% a year for three years. A 1-1 holds the rate 1% below the note rate for two full years. Bigger early savings cost more to fund. Availability depends on the loan program and investor, so confirm it before it goes into a contract.
Do I qualify at the lower payment?
Generally no. On temporary buydowns you qualify at the full note rate payment. Plan your budget around the year-three payment, not the year-one payment.
Temporary or permanent: which is better?
It depends on how long you keep the loan. A temporary buydown puts the savings up front. A permanent buydown uses points to lower the rate for the life of the loan, so the savings are smaller each month but never stop. If you expect to refinance or sell early, temporary often wins. If you plan to hold the loan, permanent usually catches up and passes it. The chart above shows the exact crossover month for your numbers.
Does a buydown count against seller concession limits?
Yes. Buydown funds from the seller count toward interested party contribution limits. Those limits depend on the program and your down payment, for example 3%, 6% or 9% on conventional loans, 6% on FHA and 4% on VA (VA treats normal closing costs separately). The calculator flags your scenario if it looks over.
What happens if I refinance or sell during the buydown?
Unused buydown funds do not disappear. They are generally applied to your loan balance or credited to you, per the buydown agreement and program rules.
Want real numbers on a real house?
Send me the address and the seller's offer. I'll run every option and tell you which one I'd take.