Seller credit or lower price?
See what changes.

Compare a temporary buydown, closing-cost credit and permanent rate buydown. Same home. Different ways to use your negotiating room.

The starting numbers are an illustration, not today’s rates or a loan offer. Replace them with your own estimates or written quotes.

Know the seller-credit limits.

3% / 6% / 9%Conventional primary & second homesUnder 10% down / 10% to under 25% / 25% or more

2%Conventional investmentAcross down-payment tiers

6%FHAOf the sales price; eligible costs only

VA: a separate rule4% for defined concessionsOrdinary seller-paid loan closing costs are outside that cap.

Conventional estimates assume an appraisal at least equal to the price and no second mortgage. The actual limit uses the lower of price or appraised value and LTV/CLTV. VA’s 4% uses the Notice of Value and requires a breakdown of concession items. Sources & assumptions

Your starting point

01 / The home & loan

Loan program & occupancyOffer / purchase price ($)Down payment (%)The same percentage applies to every option.Base note rate (%)Interest rate, not APR. Enter a quote you want to compare.Loan termClosing costs & prepaids ($)Eligible estimated costs, excluding down payment, discount points and buydown funding. Held constant for comparison.Seller concession budget ($)Compare this amount as a credit or price reduction. The comparison applies the estimated conventional/FHA limit. VA requires a cost breakdown.

02 / Your buydown choices

Temporary buydownPermanent discount points (%)One point costs 1% of the loan. It does not guarantee a 0.25% rate reduction.Quoted rate with those points (%)Enter the actual rate paired with your points quote.

Monthly extras & lender-credit option

Taxes, insurance, PMI & HOA / month ($)Zero means these are excluded. Enter a combined estimate for a fuller payment; held constant for all options.Quoted lender-credit rate (%)A separate higher-rate quote. This option uses no seller credit.Credit at that quoted rate ($)Enter the lender’s credit quote. No automatic rate-to-credit conversion.Compare remaining balance after (years)Must fit within the selected loan term.

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THE TRADE-OFFS, SIDE BY SIDE

Your comparison

Know what you’re comparing.

A temporary buydown

A 2-1 plan uses a subsidy to reduce your out-of-pocket principal-and-interest payments for two years. The note rate stays the same. Plan for the full payment, and do not depend on a future refinance. This calculator models seller-funded plans and requires the seller budget to cover the entire subsidy.

A permanent buydown

You pay discount points for a quoted lower note rate. The price of that rate varies. Any seller credit left after points goes toward estimated closing costs; if the credit falls short, the model puts the remaining eligible costs in your upfront cash.

Closing costs versus price

A credit can reduce cash needed at closing. A lower price reduces the down payment and loan amount at the same down-payment percentage. Actual taxes, insurance, fees and mortgage insurance may also change; this model holds those estimates constant.

Can I finance closing costs?

Do not assume you can add ordinary closing costs to a purchase mortgage. A seller credit or lender credit can help cover eligible costs. A lender-credit quote may carry a higher rate. Program-specific financed fees and a higher offer with seller credit require a separate review of the appraisal, loan limits and contribution rules.

Assumptions, limits & sources

This is an educational fixed-rate amortization comparison, not a rate quote, APR calculation, Loan Estimate or eligibility determination. The model excludes program-specific financed fees, tax effects, investment returns, opportunity cost, escrow changes and future refinancing. Cash shown is down payment plus modeled costs less usable credits; it is before any earnest-money deposit, prorations or other credits.

Seller credits cannot supply the down payment or reserves. Estimated conventional/FHA limits are applied to seller-credit options, assuming appraised value is at least the price and there is no subordinate financing. Other interested-party contributions consume the same limit. Grant must verify the actual appraisal, combined financing, eligible costs and program availability. VA totals are not automatically capped because ordinary closing costs and defined concessions follow different rules. Unused credit is not cash back. Any unused temporary subsidy on an early payoff is governed by the actual buydown agreement and is not modeled here.

For Fannie Mae loans, qualification with a temporary buydown uses the full note rate. Grant must confirm the rules and availability for your specific program. No option is ranked as universally best.

Calculation and source review: October 19, 2026.

YOUR GOALS. A CLEARER PLAN.

Let’s put your next move in focus.

A home, a refinance or an investment. Start with a conversation about what matters to you.

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