A temporary rate buydown lowers the buyer's payment for the first one to three years using money from the seller, the builder — or from us. Here's how it works, with real numbers, so you can use it on your next offer or listing.
Funding may come from the seller, the builder, or in some cases a lender contribution — confirmed on each file. Available on many conventional, government, and Non-QM programs.
Enter the price and a seller credit. See the price cut and the buydown side by side, tap 1/0, 2/1, or 3/2/1 to compare, then download a one-page PDF or copy a link that reopens your exact numbers.
Prefer it on its own? Open the calculator full-screen
Every example below is the same $427,500, 30-year fixed loan at a 7.875% note rate, with a full payment of $3,099.67. The note rate never changes and the buyer qualifies at the full payment — only the temporary payment changes.
On eligible programs this one may be funded by a lender contribution instead of a seller or builder credit. Year-one payment is based on a rate 1% below the note rate.
| Year 1 payment based on | 6.875% |
| Year 1 payment | $2,808.37 |
| Monthly savings | $291.30 |
| Buyer saves in year 1 | $3,495.60 |
Funding source and availability are confirmed on each file before anything is promised.
Payment is based on a rate 2% below the note rate in year one and 1% below in year two. A lender/seller split may be available on some programs.
| Year 1 (payment based on 5.875%) | $570.85/mo |
| Year 2 (payment based on 6.875%) | $291.30/mo |
| Seller contribution | $10,345.80 |
| Buyer saves over 2 years | $10,345.80 |
Every dollar the seller puts in comes back to the buyer as lower payments.
Three years of stepped-down payments. The most powerful use of a large seller concession.
| Year 1 (payment based on 4.875%) | $837.31/mo |
| Year 2 (payment based on 5.875%) | $570.85/mo |
| Year 3 (payment based on 6.875%) | $291.30/mo |
| Seller contribution | $20,393.40 |
A $20K price cut on this loan would save about $145/mo. This saves $837 in year one.
Self-employed, bank-statement, and investor buyers aren't automatically left out. We have a Non-QM option that allows a temporary buydown — ask us to confirm eligibility on the scenario.
One minute. One example. The same one we use with agents and buyers every week.
No. The note rate on the loan stays the same for the full term. A temporary buydown only reduces the payment for a set period by prepaying part of the interest; the buyer's rate, loan amount, and approval do not change.
Yes. The buyer is approved at the note rate, so there's no payment-shock risk when the buydown period ends. The buydown is a cushion, not a qualification trick.
The buydown funds are placed in an escrow account at closing. Each month the servicer draws the difference between the reduced payment and the full payment from that account.
Any funds left in the buydown account are typically applied to the loan's principal balance at payoff — the buyer doesn't lose them.
Yes — seller concession limits depend on the loan program and down payment. A buydown counts toward that limit. Send us the scenario and we'll confirm what's allowed.
Often, yes. This is one of the most powerful combinations for first-time buyers. Ask us to run it.
Send us the numbers and we'll run the buydown scenario the same day — a one-page summary you can put in front of your client. We're also happy to hop on a quick call with you and your buyer or seller to walk through it.
Or just call: (941) 529-1040