Mortgage Rate Buydown Cost vs Savings 2027 Calculator
Mortgage rate buydown 2027: Permanent buydown via discount points (1 point = 1% loan = ~0.25% rate cut, breakeven 4-6 yrs). Temporary buydowns: 2-1 (rate drops 2% Y1, 1% Y2, full Y3+) or 3-2-1 (3% drop Y1). Cost paid as escrow account, usually seller-paid in buyer's market.
Permanent Buydown (Points)
1 point = 1% of loan = ~0.25% rate reduction. Cost upfront, savings forever. Breakeven typically 4-6 years. Tax-deductible on primary residence (with itemize).
Temporary Buydown 2-1
Rate -2% Y1, -1% Y2, full Y3+. Common seller concession in slow market. Escrow account holds difference. If you refi early, unused escrow refunded.
3-2-1 Buydown
More aggressive: -3% Y1, -2% Y2, -1% Y3. Used for highest rates 7-8%+. Cost: 3-5% of loan to seller/lender.
Source and Disclaimer
Freddie Mac PMMS, CFPB mortgage disclosures. Verify rate quotes match Loan Estimate (LE) before closing.
Source: freddiemac.com PMMS, cfpb.gov. Last updated: May 2026.