How Much Do Temporary Buydowns Cost

In the previous example, the 3-2-1 buydown would probably cost around $5,500. As a rough calculation, you can figure this cost by summing the total percentage points you're buying down (such as 3-2-1 equals a total of 6 points) and then multiply that percentage times the mortgage amount. Discount that dollar amount by 5 to 15 percent. (You negotiate the exact cost of your buydown with the lender.)

Buydowns aren't cheap. Nevertheless, if affordability is your goal, then a buydown can work to reduce monthly payments and help you qualify

Temporary Buydown

Monthly Payment

$537 598 659 724

for a larger mortgage. To pay for the buydown, you can contribute some of the money, the sellers can pay part, and for low- to moderate-income homebuyers, government housing finance agencies, or even the lender itself (as part of a first-time homebuyer program), might pay part of the cost.

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