Temporary Buydown ROI Calculator
Calculate the return on investment for temporary rate buydowns (2-1, 1-0, 3-2-1)
Buydown Information
Enter your loan and buydown details
Your rate without buydown
Upfront cost paid by seller or buyer
Note: Temporary buydowns are often paid by the seller as a concession to help buyers qualify or reduce initial payments. The rate returns to standard after the buydown period.
Return on Investment
19.1%
Net benefit: $1,149
Buydown Schedule
2-1 temporary buydown
Year 15.50%
Annual savings: $4,731
Year 26.50%
Annual savings: $2,417
Year 3+7.5%
Standard rate (no savings)
Cost-Benefit Analysis
Total Payment Savings+$7,149
Buydown Cost-$6,000
Net Benefit$1,149
✓ This buydown provides a 19.1% return on the upfront cost through reduced payments.
When temporary buydowns make sense:
- • Seller offers to pay the buydown cost as a concession
- • You need lower initial payments to qualify for the loan
- • You expect income to increase in the next 1-3 years
- • You plan to refinance before the buydown period ends