Enter your loan amount, interest rate, and buydown rate into the calculator to determine your net savings.
2-1 Buydown Calculation Formula
The following formula is used to calculate the net savings from your 2-1 buydown mortgage.
Net Savings = (Loan Amount * (Interest Rate - Buydown Rate) / 100) + (Loan Amount * (Interest Rate - (Buydown Rate + 1)) / 100)
Variables:
- Net Savings is the total savings you achieve ($)
- Loan Amount is the principal amount of the loan ($)
- Interest Rate is the original interest rate on the loan (%)
- Buydown Rate is the reduced interest rate for the first year (%)
To calculate the net savings, multiply the loan amount by the difference between the interest rate and buydown rate for each year, and sum