Temporary relief
Deposited subsidy funds cover the scheduled difference between the reduced payment and the full note-rate payment during the buydown period.
Colorado temporary buydowns
Compare a 2-1 or 3-2-1 mortgage buydown.
See how a temporary buydown could change the initial principal-and-interest payments—and estimate the contribution required to fund it.
MODEL THE PAYMENT PATH
What could a temporary buydown look like?
Enter the proposed purchase price, loan amount and full note rate. The estimates update immediately.
Down payment$65,000Loan amount used$585,000
ESTIMATED PRINCIPAL & INTEREST
2-1 payment schedule
Year 15% payment rate$3,140/mo$752 less per month
Year 26% payment rate$3,507/mo$385 less per month
After the buydown7% note rate$3,892/moFull principal-and-interest payment
Estimated temporary-buydown subsidy$13,635Sum of the estimated principal-and-interest payment reductions during the buydown period.
Compare my payment options →This educational calculator estimates principal and interest only. It excludes property taxes, homeowners insurance, mortgage insurance, HOA dues and other costs. A temporary buydown does not change the mortgage note rate, and borrowers generally must qualify under applicable lender and program requirements using the required payment. Seller, builder or other contributions, eligibility, funding and unused funds are subject to the selected loan program and lender guidelines. This is not a rate quote, approval or commitment to lend.
THE DECISION THAT MATTERS
Use the seller contribution where it creates the most value.
A temporary buydown can soften the first years of payments, but it is not free money and it does not change the note rate. Compare it with a lower purchase price, permanent discount points and closing-cost assistance before deciding how to structure an offer.
Full-rate qualification
Plan around the permanent payment. Qualification and contribution rules depend on the selected mortgage program and lender.
Side-by-side advice
Compare the buydown cost against price, points and closing-cost alternatives using the same financing assumptions.
BUYDOWN QUESTIONS
Understand the structure before writing the offer.
01What is a 2-1 temporary buydown?+
A 2-1 temporary buydown uses deposited funds to reduce the borrower’s principal-and-interest payment as though the rate were two percentage points lower during year one and one point lower during year two. The mortgage note rate itself does not change.
02How does a 3-2-1 buydown differ?+
A 3-2-1 structure generally provides three years of temporary payment support: payments calculated three percentage points below the note rate in year one, two points below in year two and one point below in year three. It generally requires a larger subsidy than a 2-1 buydown.
03Who can pay for a temporary buydown?+
Permitted funding sources and contribution limits depend on the loan program, lender, transaction and occupancy. A seller or builder may be able to fund an eligible temporary buydown, but the complete structure must be reviewed before it is written into an offer.
04Does the buyer qualify using the reduced first-year payment?+
Generally, the borrower must qualify using the payment required by the applicable loan program and lender rather than assuming the temporary subsidy makes an otherwise unaffordable loan affordable. Exact qualification rules should be confirmed for the selected program.
05Is a buydown better than reducing the purchase price or paying discount points?+
Not automatically. Compare the temporary payment reduction with a price reduction, closing-cost credit or permanent rate buydown using the same purchase price, loan amount, expected time in the home and available seller contribution.
COMPARE THE REAL NUMBERS
Compare my payment options →