Temporary Mortgage Buydown / Seller Concession Comparator

Which seller incentive helps you most: a temporary buydown, closing-cost credit, or price reduction?

Compare 2-1 and 1-0 payment subsidies with a closing credit and a lower purchase price, using one available seller budget. See cash needed at closing, payment relief, and costs through your ownership horizon, including the mortgage balance still owed.

Your lender quotes and purchase assumptions

Each alternative uses this same maximum budget. Unused amounts are not cash back or automatically reassigned.

Percentage stays fixed when the price falls. Fixed dollars stay fixed, capped at the reduced purchase price; that can produce a cash purchase.

Use the note rate from a lender quote, not APR. No current market rate is supplied.

Enter a term equivalent to 1–600 whole months.

Use a lender estimate. Held fixed across alternatives; exclude the seller-funded buydown deposit to avoid double-counting.

Enter the portion of total closing costs your lender confirms can be covered. The calculator does not determine eligibility.

Whole months, from closing (0) through the loan term. Comparison assumes payoff at this horizon.

Check the actual agreement. Remaining funds are separate from unused seller budget and are not assumed to be freely available cash.

How temporary buydowns and seller concessions work

A 2-1 plan calculates the buyer's payment contribution using a rate 2 percentage points below the note rate for months 1–12, then 1 point below for months 13–24. A 1-0 plan uses 1 point below for months 1–12. Both then return to the full note-rate payment.

The lender receives the full contractual payment: the buyer contribution plus a withdrawal from the prepaid subsidy account. The mortgage note rate, principal amortization and balance match the no-incentive loan. The estimated subsidy deposit is the sum of those monthly payment differences. Confirm the exact funding amount and any separate fees with your lender.

A buydown is shown as unavailable if the seller budget cannot fully fund it, its reduced rate would be negative, or the loan term is too short. No partial plan or additional buyer funding is assumed. A closing credit uses the lesser of the seller budget and your lender-confirmed eligible costs. A price reduction uses the seller budget to lower the purchase price; the selected down-payment strategy determines the new loan.

Remaining balance uses fixed-rate monthly amortization. Horizon benefit = no-incentive cash outlay and balance minus alternative cash outlay and balance, plus an explicitly selected credit of unused buydown funds at payoff. This is an undiscounted comparison, not a forecast of investment returns or resale profit.

Assumptions and limitations

Fixed-rate loans only. Enter a permanent interest rate and lender quotes; no live rate feed or jurisdiction tables are used. Monetary inputs are supported up to $1 billion, note rates 0–100%, and terms up to 600 whole months. A 0% rate is valid, but negative subsidized rates are not modeled. All personal numeric inputs start empty.

Buyer cash at closing is down payment plus total quoted closing costs, less any closing credit. Earnest money already paid is not deducted. Total quoted closing costs stay fixed even when the purchase price or loan amount changes; obtain revised quotes if fees change. PMI, taxes, insurance, HOA, property appreciation, selling costs, discounting, refinance and investment earnings are excluded. Those omissions can change the real-world ranking, especially if a changed loan-to-value ratio affects mortgage insurance.

Unused seller budget is not assumed to be paid to the buyer. Unused subsidy-account funds at the horizon are shown separately. Their treatment on sale, refinance or payoff depends on the agreement; choose a buyer credit only if the agreement supports it. The default gives no buyer credit.

This tool does not determine loan eligibility, qualifying income, allowable contribution limits, tax treatment or approval. It does not assume you can qualify using the temporarily reduced payment or that refinancing will be available. Lenders must confirm program and transaction rules. Price reduction and seller-funded concessions can have different appraisal and program treatment.

Official references, checked October 8, 2026: Fannie Mae temporary interest rate buydowns and interested party contributions. These describe Fannie Mae requirements, not universal rules for every mortgage program.

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