Buydown Calculator

Educational only: Numbers shown are estimates, not a loan offer or commitment to lend.

Subject to change: Rates, terms, costs, and eligibility can change based on credit, income, assets, property, and market conditions.

Underwriting applies: All loans must meet program and investor guidelines. Additional documentation may be required.

Use the calculator for ballpark figures, then verify with your loan officer.

FHA

• Flexible credit (typically 580+).
• UFMIP (1.75%) may be financed; Annual MIP varies by term, price, and down payment.

Conventional

• PMI applies when LTV > 80%; removable later.

Jumbo

• For loan amounts above $1,209,750 (local high-balance limit).
• No MI; tighter credit/reserve needs.

VA

• No monthly MI; Funding Fee may apply unless exempt.

A buydown lowers your rate for the first 1–3 years, funded upfront (often by the seller/builder).

• 1-0: 1% lower rate in Year 1.
• 2-1: 2% lower in Year 1; 1% lower in Year 2.
• 3-2-1: 3%/2%/1% lower in Years 1–3 (common with jumbo).

Your tables show both Buyer Savings and Seller Cost for each scenario.

Conventional MI (PMI): Applies when LTV > 80% and varies by credit & LTV.

FHA MIP: Upfront (UFMIP, typically 1.75%) + Annual MIP (varies).

VA Funding Fee: One-time fee unless exempt; no monthly MI.

• Principal – Reduces your balance.
• Interest – Cost to borrow.
• Taxes – Property tax escrow (monthly portion).
• Insurance – Homeowner’s policy (monthly portion).
• Association – HOA dues, if any.

Interest Rate = the note rate on your loan.

APR = interest rate + certain upfront costs (e.g., UFMIP/Funding Fee/points) expressed annually, for apples-to-apples comparisons.

• Compare **APR**, not just rate.
• Ask if a **buydown** or **seller concession** is included.
• Confirm **MI/MIP/Funding Fee** and whether it’s financed.
• Review **cash to close** and **monthly PITIA**.
• For Conventional, ask when PMI can be removed.