Interest Rate Buydown (or 2-1 Buydown) Calculator displays savings by participating in a
temporary interest rate buydown

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Interest Rate (2-1) Buydown Calculator

This mortgage calculator will calculate the savings you can achieve by participating in a temporary interest rate buydown program. Compare your total savings to your cost to participate in the program.

A popular form of this program is the 2-1 buydown mortgage. This means that the interest rate is reduced 2% the first year, and 1% the second year of the loan. Other variations include the 3-2-1 buydown and so forth.

  • Loan Amount - this is the beginning balance on the loan.
  • Base Interest Rate - this is the annual interest rate you will pay on the loan.
  • Years - what is the length of the loan in years.
  • Payments / Year - how many payments will you make per year (12 for monthly or 26 for biweekly)
  • First Year Reduction - The number of percentage points your base rate will be lowered during the first year of the loan.
  • Second Year Reduction - The number of percentage points your base rate will be lowered during the second year of the loan.
  • Third Year Reduction - The number of percentage points your base rate will be lowered during the third year of the loan.
Loan Amount
Base Interest Rate (APR)
Duration of loan in years
Payments per year
First Year Reduction
Second Year Reduction
Third Year Reduction

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