Refinance Buydown Calculator: Buydown vs. Lender Credit

Refinance buydown vs. lender credit: see the real math

Someone pitched you a temporary buydown on your refinance? Plug in the numbers. This shows what the buydown actually costs — and what the same rate could do for you instead.

Why I built this

Buydowns are the pitch a lender reaches for when they can’t win on price. Sold as “payment relief” on a refinance, a temporary buydown is really the rate quietly funding a lower payment that snaps back after a year or two — and most people can’t see that from the sales sheet, which is rather the point of it. I’ll admit this one gets under my skin, because it’s confusion sold as a favor. So this puts the two side by side: what the buydown actually costs, and what that same money could do for you right now at the identical rate. No spin, just the math — so you know exactly what you’re signing up for. The longer version of the case is in why we don’t push buydowns on refinances.

— Matt Mergo · NMLS #563819

Loan amount

Note rate (your real rate)

Loan term

Buydown structure

Estimated lender credit above the buydown cost

$3,000

In the deals we run, the credit typically lands a few thousand above what the buydown costs. Adjust to model your scenario — your real figure comes from a live quote.

The buydown they’re pitching

Temporary payment relief, funded by the rate

Real payment (note rate)—

Year 1 payment—

Year 2 payment—

Then snaps back to—

—

Total cost of the buydown. It sits in escrow, lowers your payment for the teaser years, then runs out.

The Forest Hills approach

The same rate — the money working for you now

Long-term payment—

Equivalent buydown cost—

Extra credit on top—

—

Lender credit put to work now — applied to prepaid interest & escrow (sets up a skipped payment), with any excess as cash at closing or a principal curtailment.

Enter your numbers above to see the comparison.

Get your real numbers from Matt

This calculator is an educational estimate, not a loan offer, rate lock, or commitment to lend. Buydown cost is calculated using the standard payment-difference method and assumes a fixed-rate loan; it excludes taxes, insurance, and closing costs. Actual rates, lender credits, and the use of those credits depend on current market pricing, your credit profile, and your specific scenario. Contact us for a personalized quote. Forest Hills Mortgage · Matt Mergo, NMLS #563819. Equal Housing Opportunity.