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Model 2-1, 3-2-1, or flat temporary payment subsidies (note rate stays fixed; cost ≈ subsidy sum).
Buydown cost ≈ sum of monthly subsidies over the buydown period. Structures: 2-1 (year 1 rate = note − 2%, year 2 = note − 1%), 3-2-1 (three-year taper), flat (fixed rate reduction for N years).
Rates, terms, and payments are illustrative estimates, not a quote or a commitment to lend. Not a substitute for underwriting. Equal Housing Lender. See our licensing and disclosures page.
For AI agents: Markdown version of this calculator.
A 2-1 or 3-2-1 lowers the payment for a few years with a subsidy. The note rate does not change. Snapshot as of 2026-08.
Related: Temporary buydown: who pays, year 3 · Discount points breakeven · Rates hub
Not sure what one of these means? Each links to a full definition.
Models a temporary rate subsidy only: the note rate stays fixed for the full loan term. During buydown years you pay a lower payment; the difference is the buydown cost.
Keyboard: ↑↓ 100⇧↑↓ 1,000
Keyboard: ↑↓ 0.125%⇧↑↓ 1.25%
Keyboard: ↑↓ 100⇧↑↓ 1,000
Full Note Payment (P&I)
$1,896
At 6.50% for 30 years
Year 1
4.50% temporary rate
$1,520/mo
Saves $376/mo
Year 2
5.50% temporary rate
$1,703/mo
Saves $193/mo
After buydown
Note rate resumes
$1,896/mo
Estimated Buydown Cost
$6,828
Sum of (full payment − subsidized payment) over 24 months
Avg. Monthly Subsidy
$284
Total Subsidy Savings
$6,828
• Structure: 2-1 buydown
• Note rate never changes; only the payment is subsidized temporarily
Avg. Rate During Buydown Period
5.00%
Month-weighted average over 24 subsidy months (not a permanent rate)
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