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2-1 Buydown Calculator
See how a 2-1 buydown could reduce your mortgage payments in the first two years. Enter your loan amount, rate, and term to estimate your savings and the total buydown cost. Estimates only - actual results depend on your loan program, lender, and scenario.
| Year | Rate | Payment | Monthly Savings | Annual Savings |
|---|---|---|---|---|
| 1 | — | — | — | — |
| 2 | — | — | — | — |
| 3–30 | — | — | — | — |
Buydown Total Cost: —
Total estimated cost - can be paid by buyer, seller, lender, or third party.
Disclaimer: This calculator provides estimates for informational purposes only. Results reflect principal and interest only and do not include property taxes, homeowner's insurance, mortgage insurance, or HOA dues. Actual payments, rates, and program eligibility are subject to credit review, income verification, property appraisal, and lender approval. This does not constitute a loan offer or commitment to lend.
How to Use This Calculator
Follow these steps to see how a temporary rate reduction may affect your monthly payment and total buydown cost.
Enter Your Loan Details
Input your loan amount, interest rate, and loan term. This gives the calculator the foundation it needs to estimate your payments.
Review Estimated Savings
See how your reduced payments during the two-year buydown period compare to your standard fixed payment once the rate returns to normal.
Understand the 2-1 Structure
Your rate is reduced by 2% in year one and 1% in year two. Starting in year three, your loan runs at its original fixed rate for the remaining term.
Check Fees and Eligibility
Buydown costs vary and are often covered by the seller or builder. Not all loan programs allow buydowns, and additional restrictions may apply. Talk with a loan officer to confirm eligibility.
2-1 Buydown FAQ
What is a 2-1 buydown?
A 2-1 buydown is a temporary interest rate reduction on a fixed-rate mortgage. Your rate is reduced by 2% in the first year and 1% in the second year. Starting in year three, your loan returns to its original fixed rate for the remaining term.
Who pays for the buydown?
The buydown cost is often paid by the seller, builder, or lender as a closing concession - though a buyer can also pay for it. The total cost equals the sum of the monthly savings over the two-year reduced-rate period.
Does the buydown change my actual loan rate?
No. Your note rate stays the same. The buydown simply subsidizes the difference between your actual rate and the temporarily reduced rate during years one and two. Starting in year three, you pay your full note rate as normal.
What loan programs allow a 2-1 buydown?
Many conventional, FHA, VA, and USDA loans permit temporary buydowns, but eligibility and guidelines vary by program and lender. Talk with a loan officer to confirm whether a buydown is available for your specific loan.
Are the payments shown here my exact payments?
No. This calculator estimates principal and interest only. Your actual monthly payment will also include property taxes, homeowner's insurance, mortgage insurance (if applicable), and HOA dues. These are estimates for comparison purposes only.
Want to Know If a 2-1 Buydown Makes Sense for You?
Our loan officers can walk you through buydown programs, seller concession strategies, and how to compare your options. We serve borrowers in Alabama, Florida, Georgia, Louisiana, Michigan, and Tennessee.
American Mortgage Services — Licensed Mortgage Broker in AL, FL, GA, LA, MI & TN — Equal Housing Lender