Stewardship Capital
Enter the file. We'll show the credit needed to fund a temporary buydown, and what the buyer actually pays each year.
Change any one of these three and the other two follow.
Seller credit needed
$0
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A 2-1 buydown lowers the buyer's interest rate by 2 percentage points in year 1 and 1 percentage point in year 2. From year 3 on, the rate goes back to the note rate. The seller credit pays for the lower payments in those first two years, so the buyer gets a smaller monthly payment while the credit is used.
A 1-0 buydown lowers the buyer's interest rate by 1 percentage point in year 1 only. From year 2 on, the payment is based on the note rate. It costs less than a 2-1 buydown because it covers one year, not two.
The credit equals the total payment savings across the buydown years. For example, on a $625,000 purchase with 5% down ($593,750 loan), a 7.17% note rate and a 30-year term, a 2-1 buydown needs about $13,946 in seller credit, or 2.23% of the purchase price. Year 1 at 5.17% is $3,249 a month ($769 less than the full payment), and year 2 at 6.17% is $3,625 a month ($393 less). From year 3 the payment is $4,018 a month. The calculator above works out the credit for your own numbers.
On the same example ($593,750 loan at 7.17% for 30 years), a 1-0 buydown needs about $4,719 in seller credit, or 0.76% of the purchase price. Year 1 at 6.17% is $3,625 a month ($393 less than the full payment of $4,018).
Yes. Seller credits count toward each loan program's seller concession limit. Conventional loans allow 3% with less than 10% down, 6% with 10% to 24.99% down and 9% with 25% or more down, and 2% on investment properties. FHA allows 6%, VA allows 4% and USDA allows 6%. See the seller concession limits page for the full breakdown.
No. The figures cover principal and interest only, not property taxes, homeowners insurance or mortgage insurance. They are estimates, not a quote, a commitment to lend or an offer of credit.
How this is calculated: standard fixed-rate mortgage payment (amortization) formula, comparing the payment at the note rate with the payment at the reduced rate for each buydown year. Seller concession limits are the general limits for conventional (Fannie Mae and Freddie Mac), FHA, VA and USDA loans. Last reviewed November 2026.
Estimates only. Figures cover principal and interest, not taxes, insurance or mortgage insurance. This is not a quote, a commitment to lend or an offer of credit. Seller credits are subject to each program's concession limits — check the limit before writing the offer. Stephen Chakerian, NMLS #2193331 | Stewardship Capital, a team of Barrett Financial Group, L.L.C., NMLS #181106 | Equal Housing Opportunity.
