Estimated principal & interest
$2,528/month- Loan amount
- $400,000
- Total interest
- $510,178
- Total P&I payments
- $910,178
Excludes taxes, insurance, mortgage insurance, dues and closing costs.
Offer Advantage
Same seller dollars. A smarter offer.
Compare a lower purchase price with using the same seller dollars to permanently buy down the mortgage rate.
The monthly picture
Two ways to use $10,000.
Reduce the price
Borrow less at the original rate.
- Purchase price
- $390,000
- Interest rate
- 6.75%
- Loan amount
- $312,000
- Principal & interest
- $2,023.63/mo
- Estimated upfront cash
- $84,000
$52 less than no negotiation
Buy down the rate
Use a seller credit for permanent discount points.
- Purchase price
- $400,000
- Interest rate
- 6%
- Loan amount
- $320,000
- Principal & interest
- $1,918.56/mo
- Estimated upfront cash
- $86,000
$157 less than no negotiation
Rate buydown creates approximately $105.06 per month of payment advantage.Includes the entered taxes, insurance, HOA and mortgage insurance.
The long view
Which strategy costs less over time?
Rate buydown comes out ahead.
Lower modeled cost, including the remaining loan balance.
| Time | Price-cut cost | Buydown cost | Better overall |
|---|---|---|---|
| 5 years | $537,310 | $537,888 | Price reduction$578 advantage |
| 10 years | $670,974 | $662,022 | Rate buydown$8,953 advantage |
| 15 years | $793,934 | $775,697 | Rate buydown$18,237 advantage |
| 30 years | $1,046,505 | $1,010,682 | Rate buydown$35,823 advantage |
Overall cost equals upfront cash, payments through that date and the remaining loan balance. It is a comparison measure—not a bill due.
When the buydown takes a lasting overall-cost lead in this model.
Reduction needed to match the buydown’s principal-and-interest payment.
Price reduction requires less upfront cash.
Same modeled proceeds. Different buyer benefits.
Price cut: $390,000 · Buydown: $390,000
How this comparison works
Both scenarios use the selected fixed loan term, the same down-payment method and the entered costs. The price reduction lowers the purchase price. The buydown keeps the original price and applies seller credit first to permanent discount points, then to other modeled eligible closing costs.
Payments use monthly amortization with unrounded calculations. The model does not include appreciation, investment returns, tax deductions, maintenance, selling or refinancing expenses, escrow deposits or prepaid interest. Seller-concession limits, appraisal support, mortgage insurance and rate pricing require lender review.
This compares permanent discount points—not temporary 2-1 or 1-0 buydowns. Results are educational estimates, not an APR, approval, commitment to lend or Loan Estimate.
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Methodology
Each calculator shows its assumptions and produces an educational planning estimate. Results are not a quote, approval, commitment to lend or Loan Estimate.