Estimate the cost of a seller-paid temporary interest-rate buydown and show the buyer’s payment path year by year. Taxes and insurance are included in the displayed housing payment, while the buydown subsidy itself is based on principal-and-interest payment differences.
Year 1 is generally 3 percentage points below the note rate, year 2 is 2 points below, year 3 is 1 point below, then the payment moves to the full note rate.
Year 1 is generally 2 percentage points below the note rate, year 2 is 1 point below, then the payment moves to the full note rate.
The first year is generally 1 percentage point below the note rate, then the payment moves to the full note rate in year 2.
The note-rate field opens with the latest benchmark embedded in this version: Freddie Mac PMMS® 30-year fixed average of 7.28% as of October 1, 2026. It is a market reference only. Agents should replace it with the applicable note rate for a specific scenario.
For each temporary period, the calculator compares the principal-and-interest payment at the note rate with the payment calculated at that year’s reduced rate. The monthly difference is multiplied by the number of months in that period and added together.
They help illustrate the buyer’s estimated total monthly housing payment. Because those items do not change when the interest rate is temporarily reduced, they are not included in the seller’s estimated buydown subsidy.