Seller-Paid Buydown Calculator
Built for the price-reduction conversation. Compare what the same seller dollars do as a price cut versus a temporary rate buydown, using the rate your buyer actually has. This tool never supplies a rate.
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Why the same dollars feel so different
When a listing sits and the price-reduction conversation starts, most sellers think in price. Most buyers feel payment. A price cut spreads its benefit over thirty years, so even a meaningful reduction often moves the monthly payment less than buyers expect. A seller-paid temporary buydown concentrates the same dollars into the first one to three years, when payment shock is most likely to kill the deal.
Mechanically, the seller credit funds an escrow account at closing. Each month during the buydown period, that account supplements the buyer's payment, so the buyer pays as if the rate were lower. The loan itself, and the rate on the note, never change, and the buyer still qualifies at the full note rate.
Neither option is automatically right. A price cut lowers the loan balance and the payment forever, and it compounds if the buyer ever refinances. A buydown delivers several times the monthly relief during the years a buyer is most stretched. The point of this tool is that you can show a seller or buyer both options for the exact dollars on the table, in one screen, before anyone writes an addendum.
Want a second set of eyes on a specific listing or offer? Grab a time with Dan or call or text (610) 999-4710, and bring the contract terms. This calculator is part of the free realtor toolkit.
Frequently asked questions
What is a seller-paid 2-1 buydown?
It is a seller credit that funds a temporary reduction in the buyer's effective payment: the buyer pays as if the rate were 2 percentage points lower in year one and 1 point lower in year two, then the full note rate from year three on. The credit sits in an escrow account and supplements each payment during those first two years. The note rate itself never changes.
Is a buydown better than a price reduction?
It depends on what the deal needs. The same dollars produce far more monthly relief in the early years as a buydown, which helps a payment-sensitive buyer say yes. A price reduction lowers the loan balance and the payment permanently. This calculator exists to show both outcomes side by side so the seller, the agents, and the buyer are comparing real numbers instead of instincts.
Does the buyer still have to qualify at the full rate?
Yes. With a temporary buydown the buyer qualifies at the full note rate, not the bought-down payment. That protects the buyer from a payment they cannot actually afford in year three, and it means a buydown is a comfort tool, not a qualification workaround.
What happens to the buydown money if the buyer refinances or sells early?
The unused balance in the buydown escrow account is credited toward the loan payoff under the buydown agreement, and it does not revert to the seller. That makes a buydown less risky than it first sounds if rates drop and the buyer refinances.
Do buydown funds count toward seller concession limits?
Yes. A seller-paid buydown is an interested-party contribution, and every loan program caps those contributions based on the loan type, occupancy, and down payment. The caps differ enough between programs that it is worth checking before writing the credit into a contract. Text Dan the deal terms at (610) 999-4710 and he will confirm what the buyer's program allows.
Ready to see your actual numbers?
The calculator models scenarios. Dan shops 160+ lenders to find your real rate. Grab a call or start your application and we will walk through it together.