Rate Buydown Calculator
Many builders here are offering rates well below the market. See what a lower rate is really worth over time, and whether paying for one yourself makes sense.
What Builders Here Are Offering
We read the listing remarks on all 357 new homes for sale in Madison and Limestone counties in Valley MLS on November 4, 2026.
- 46 homes name a special rate, most often 5.5%, with a few at 4.99%.
- 49 mention help with closing costs, often 0,000.
- 16 mention a rate buydown, such as a 2-1.
- About half of the homes with an offer name a preferred lender.
- We did not find a price cut offered as an incentive.
Many builders post offers only on their own websites, and offers change often, so ask before you decide.
Want a Second Set of Eyes on the Numbers?
Builder offers change often, and the fine print matters. Send us the offer and we will walk through it with you.
Questions About Rate Buydowns
How does a fixed rate buydown work?
You or the builder pay the lender money at closing, called discount points, and the lender gives you a lower rate for the full loan. For example, $15,000 on a $332,500 loan might take a rate from 7.25% to about 6.1%, which lowers the payment by about $250 a month for all 30 years. You save a little every month, so it takes time to earn the money back. If you sell or refinance early, the rest of that value is gone. Actual pricing varies by lender, so get a quote.
What is a temporary buydown?
A 2-1 lowers your rate by 2% in year one and 1% in year two, then it returns to the full rate. A 3-2-1 starts 3% lower and a 1-0 lowers year one only. The money is set aside at closing to cover the difference, so it helps with early payments but does not lower your long-term rate.
What about a 4.99% adjustable rate?
Some builders offer a low starting rate on an adjustable loan, such as a 5/1 ARM. The rate stays the same for the first 5 years, then it can change. This calculator does not cover those loans, because nobody can know the later payments. Ask your lender how high the rate and payment could go, and compare the APR.
How long do people usually keep a home?
Redfin reports the typical U.S. homeowner stayed about 12 years as of 2025. A loan can end sooner than that, though, because a refinance also ends a buydown.
Does this calculator give me a loan quote?
No. It is an estimate for comparing options. It uses principal and interest only and a rule of thumb for points. Your lender can give you the actual rate, points and costs. Enter those here to see your real numbers.
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