2-1 buydown calculator
A 2-1 buydown temporarily reduces your interest rate for the first two years. Enter your numbers to see the lower payments and total first-two-year savings.
Reviewed by Brian Stroka, NMLS #1682839·Free, no signup·Equal Housing Lender
A 2-1 buydown lowers your rate by 2% in year one and 1% in year two, then settles at the note rate.
| Period | Rate | Monthly P&I | Monthly savings |
|---|---|---|---|
| Year 1 | 4.75% | $2,113 | $514 |
| Year 2 | 5.75% | $2,363 | $263 |
| Year 3+ | 6.75% | $2,627 | - |
$9,330 saved in the first two years
Frequently asked questions
- Who pays for a buydown?
- The buydown cost is usually paid at closing, often by the seller or builder as a concession, sometimes by the lender or buyer. The funds are held in escrow and applied to your payment each month.
- What happens after year two?
- Your rate returns to the full note rate for the remainder of the loan. A buydown is most useful if you expect income to rise or plan to refinance if rates fall.
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Questions about your numbers?
Brian Stroka, Loan Officer · NMLS #1682839