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Buy Down The Rate

2/1 Buydown. When you make an up-front cash payment to reduce your monthly payments on a mortgage loan, it’s called a buydown. In a temporary buydown, your payments during the buydown period are calculated at a lower interest rate than the actual rate on your loan, which makes the payments smaller.

It will show you exactly how much a rate buy-down will either save you or cost you, based upon the information you enter. The points calculator will provide a summary report on a loan scenario with a rate buy-down, along with a loan scenario without buying points and instead applying the money you would have paid for points to reduce the amount financed.

$1,200 to interest rate buy down get to a new rate of 3.75% for a 30 year loan and 3.50% for a 15 year loan; $2,400 to interest rate buy down gets to a new rate of 3.5% for the 30 and 3.0% for the 15; $3,600 to interest rate buy down gets a new rate of 3.25% for the thirty and 2.5% for the 15, and so on.

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Buy-down refers to a reduction in the interest rate of a loan. This reduction is often compensated by a payment made when the loan is taken out, either by the borrower or the lender.This payment, when made by the buyer, is known as buying discount points.

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Buying a lower rate is not for everyone. It takes additional funds at the start of your mortgage, and sometimes these additional funds can be hard to come by. But if you’re buying a home with a fixed-rate loan and plan to be there for a while, a little cash can go a long way to help you save. Hopefully, this has given you a better understanding of mortgage points and buying down your interest rate.

Hi, I need help in creating a formula to make a Rate buy down calculator and need your help. My requirement for Example: loan amount $25,000 Custom rate is 5% Term of Loan is 5 years Amortization is 5 years Buy down rate say 1.00