Calculator Documentation
Temporary Buydown Calculator
Calculate 2-1 and 3-2-1 buydown costs, reduced payments, and required seller credit
Schema version 1.0.0 · Category: mortgage
Inputs
Loan Details
Your loan and note rate
| Field | Type | Default | Notes |
|---|---|---|---|
| Loan Amount | currency | $400,000 | Total mortgage amount |
| Note Rate | percentage | 6.50% | The permanent rate on the loan (what payments return to after the buydown) |
| Loan Term | select | 30 | Length of the mortgage |
| Buydown Type | select | 2 | How deep the temporary rate reduction goes |
Calculations
Every figure this calculator produces, in evaluation order. Formulas reference input ids, parameters, and earlier calculations.
monthlyRateMonthly note rate
interestRate / 12
termMonthsTerm in months
loanTerm * 12
fullPaymentP&I at the full note rate
(loanAmount * monthlyRate * pow(1 + monthlyRate, termMonths)) / (pow(1 + monthlyRate, termMonths) - 1)
yr1MonthlyRateYear 1 reduced monthly rate
max(interestRate - buydownType / 100, 0.000001) / 12
yr2MonthlyRateYear 2 reduced monthly rate (note rate for a 1-0)
max(interestRate - max(buydownType - 1, 0) / 100, 0.000001) / 12
yr3MonthlyRateYear 3 reduced monthly rate (note rate unless 3-2-1)
max(interestRate - max(buydownType - 2, 0) / 100, 0.000001) / 12
yr1PaymentP&I during year 1
(loanAmount * yr1MonthlyRate * pow(1 + yr1MonthlyRate, termMonths)) / (pow(1 + yr1MonthlyRate, termMonths) - 1)
yr2PaymentP&I during year 2
(loanAmount * yr2MonthlyRate * pow(1 + yr2MonthlyRate, termMonths)) / (pow(1 + yr2MonthlyRate, termMonths) - 1)
yr3PaymentP&I during year 3
(loanAmount * yr3MonthlyRate * pow(1 + yr3MonthlyRate, termMonths)) / (pow(1 + yr3MonthlyRate, termMonths) - 1)
yr1SavingsYear 1 payment relief
(fullPayment - yr1Payment) * 12
yr2SavingsYear 2 payment relief
(fullPayment - yr2Payment) * 12
yr3SavingsYear 3 payment relief
(fullPayment - yr3Payment) * 12
totalBuydownCostTotal buydown cost: the escrow the seller credit must fund
yr1Savings + yr2Savings + yr3Savings
yr1MonthlyReliefMonthly payment relief in year 1
fullPayment - yr1Payment
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