1-0, 2-1 and 3-2-1 payment savings
Amortization with Buydown
Compare temporary buydown payments with no buydown, see early-year savings, and explore the full principal and interest schedule at your note rate.
The fixed contractual rate for the life of the loan.
Reductions are percentage points below the note rate.
Year 1 borrower P&I
$2,026.74
Payment based on 4.500%
No-buydown monthly P&I
$2,528.27
Full note rate: 6.500%
Total payment savings
$9,103.68
Subsidy needed for the first 24 months
Monthly P&I: buydown vs. no buydown
Payments rise at each loan-year boundary and return to $2,528.27 in month 25. Both loans have the same remaining balance, principal and interest schedule; the buydown only changes who funds the payment.
Where you save during the buydown
| Period | Payment rate | Borrower P&I / mo | No buydown / mo | Savings / mo | Year savings |
|---|---|---|---|---|---|
| Year 1 (months 1-12) | 4.500% | $2,026.74 | $2,528.27 | $501.53 | $6,018.36 |
| Year 2 (months 13-24) | 5.500% | $2,271.16 | $2,528.27 | $257.11 | $3,085.32 |
| Year 3 onward | 6.500% | $2,528.27 | $2,528.27 | $0.00 | $0.00 |
Fine print: Your 2-1 buydown reduces out-of-pocket P&I by $9,103.68 during the first 24 months, assuming all scheduled payments are made. These are payment savings funded by the buydown account, not a reduction in the note rate or interest charged.
A seller, builder, lender or other permitted party must fund the subsidy at closing, subject to program and concession limits. If you fund it yourself, the upfront cost offsets these payment savings; this calculator does not represent net economic savings or compare alternative uses of that credit.
Interest and principal are calculated at the full 6.500% note rate. Total loan interest remains $510,179.81 with or without the buydown. Borrowers generally must qualify at the full note-rate payment. Taxes, insurance, mortgage insurance, HOA dues, closing costs and investment returns are excluded.
This assumes a fixed-rate loan with no prepayments. Refinancing or early payoff can end the subsidy; treatment of unused funds depends on the buydown agreement and loan program. Estimates are not a rate quote, approval or commitment to lend. The final payment may vary slightly due to rounding.
Amortization schedule
| Year | No buydown P&I | Borrower P&I | Savings | Principal | Interest | Balance |
|---|---|---|---|---|---|---|
| 1 | $30,339.24 | $24,320.88 | $6,018.36 | $4,470.86 | $25,868.38 | $395,529.14 |
| 2 | $30,339.24 | $27,253.92 | $3,085.32 | $4,770.29 | $25,568.95 | $390,758.85 |
| 3 | $30,339.24 | $30,339.24 | $0.00 | $5,089.77 | $25,249.47 | $385,669.08 |
| 4 | $30,339.24 | $30,339.24 | $0.00 | $5,430.65 | $24,908.59 | $380,238.43 |
| 5 | $30,339.24 | $30,339.24 | $0.00 | $5,794.35 | $24,544.89 | $374,444.08 |
| 6 | $30,339.24 | $30,339.24 | $0.00 | $6,182.38 | $24,156.86 | $368,261.70 |
| 7 | $30,339.24 | $30,339.24 | $0.00 | $6,596.45 | $23,742.79 | $361,665.25 |
| 8 | $30,339.24 | $30,339.24 | $0.00 | $7,038.21 | $23,301.03 | $354,627.04 |
| 9 | $30,339.24 | $30,339.24 | $0.00 | $7,509.58 | $22,829.66 | $347,117.46 |
| 10 | $30,339.24 | $30,339.24 | $0.00 | $8,012.53 | $22,326.71 | $339,104.93 |
| 11 | $30,339.24 | $30,339.24 | $0.00 | $8,549.13 | $21,790.11 | $330,555.80 |
| 12 | $30,339.24 | $30,339.24 | $0.00 | $9,121.67 | $21,217.57 | $321,434.13 |
| 13 | $30,339.24 | $30,339.24 | $0.00 | $9,732.56 | $20,606.68 | $311,701.57 |
| 14 | $30,339.24 | $30,339.24 | $0.00 | $10,384.40 | $19,954.84 | $301,317.17 |
| 15 | $30,339.24 | $30,339.24 | $0.00 | $11,079.86 | $19,259.38 | $290,237.31 |
| 16 | $30,339.24 | $30,339.24 | $0.00 | $11,821.89 | $18,517.35 | $278,415.42 |
| 17 | $30,339.24 | $30,339.24 | $0.00 | $12,613.61 | $17,725.63 | $265,801.81 |
| 18 | $30,339.24 | $30,339.24 | $0.00 | $13,458.37 | $16,880.87 | $252,343.44 |
| 19 | $30,339.24 | $30,339.24 | $0.00 | $14,359.73 | $15,979.51 | $237,983.71 |
| 20 | $30,339.24 | $30,339.24 | $0.00 | $15,321.40 | $15,017.84 | $222,662.31 |
| 21 | $30,339.24 | $30,339.24 | $0.00 | $16,347.49 | $13,991.75 | $206,314.82 |
| 22 | $30,339.24 | $30,339.24 | $0.00 | $17,442.33 | $12,896.91 | $188,872.49 |
| 23 | $30,339.24 | $30,339.24 | $0.00 | $18,610.48 | $11,728.76 | $170,262.01 |
| 24 | $30,339.24 | $30,339.24 | $0.00 | $19,856.87 | $10,482.37 | $150,405.14 |
| 25 | $30,339.24 | $30,339.24 | $0.00 | $21,186.72 | $9,152.52 | $129,218.42 |
| 26 | $30,339.24 | $30,339.24 | $0.00 | $22,605.61 | $7,733.63 | $106,612.81 |
| 27 | $30,339.24 | $30,339.24 | $0.00 | $24,119.55 | $6,219.69 | $82,493.26 |
| 28 | $30,339.24 | $30,339.24 | $0.00 | $25,734.90 | $4,604.34 | $56,758.36 |
| 29 | $30,339.24 | $30,339.24 | $0.00 | $27,458.41 | $2,880.83 | $29,299.95 |
| 30 | $30,341.85 | $30,341.85 | $0.00 | $29,299.95 | $1,041.90 | $0.00 |
| Total | $910,179.81 | $901,076.13 | $9,103.68 | $400,000.00 | $510,179.81 | $0.00 |
Monthly interest is rounded to the cent at the note rate; the final payment is adjusted to pay off the balance exactly. Borrower P&I plus the subsidy equals the full scheduled payment.