Temporary Buydown Calculator for Colorado Homebuyers

A temporary buydown reduces the portion of your mortgage payment you pay during the first one, two or three years. An upfront funded account covers the difference between your reduced payment and the loan’s scheduled payment. Your contractual interest rate stays the same.

The numbers describe how many percentage points below the note rate are used to calculate your introductory payments:

3-2-1: Three percentage points lower in year one, two in year two and one in year three.

2-1: Two percentage points lower in year one and one in year two.

1-1: One percentage point lower for each of the first two years.

1-0: One percentage point lower for the first year.

After the introductory period, you pay the full scheduled principal-and-interest payment. Available structures vary by lender and loan program.

The estimated upfront subsidy equals the total payment differences covered during the buydown period. The amount depends on your loan amount, note rate, loan term and selected structure. This calculator estimates that subsidy; additional lender or administration fees, if applicable, are separate.

Yes, it may be possible to negotiate seller funding as part of seller-paid closing costs. The seller must agree, and the contribution must meet lender and loan-program requirements. Other seller-paid costs also count toward applicable limits, so review the complete credit with your lender and real estate agent before finalizing an offer.

For a fixed-rate loan, lenders generally qualify you using the full note-rate payment, along with taxes, insurance and other required housing expenses. The reduced introductory payment generally does not increase the amount you qualify to borrow.

By default, the calculator shows principal and interest only. Open “Optional expenses & financed fees” to enter property taxes, homeowners insurance, mortgage insurance and HOA dues. The calculator includes only the amounts you enter and holds them constant for illustration. Actual expenses can change.

A temporary buydown uses funded assistance to reduce your introductory payments while your note rate remains unchanged. A permanent rate buydown generally involves paying discount points at closing in exchange for a lower contractual interest rate. Comparing the upfront costs, monthly payments and how long you expect to keep the loan can help you evaluate the options.