Temporary Buydown Calculator — 1-0, 1-1, 2-1 & 3-2-1
See exactly how much a temporary buydown lowers your monthly payment — and how much the seller or builder needs to contribute to fund it. Calculate all four buydown structures side by side.
Buydown Calculator
| Year | Effective Rate | Monthly Payment | Monthly Savings | Annual Savings |
|---|---|---|---|---|
| Year 1 | 4.750% | $3,652 | $889 | $10,664 |
| Year 2 | 5.750% | $4,085 | $455 | $5,462 |
| Year 3+ | 6.750% (Note Rate) | $4,540 | — | — |
Full Rate Monthly Payment
$4,540
Year 1 Monthly Payment
$3,652
Year 1 Monthly Savings
$889/mo
Total Buydown Cost (Seller Pays)
$16,126
= Total Payment Savings ($16,126)
Understanding the Four Buydown Structures
1-0 Buydown
Your rate is reduced by 1% for the first year only, then jumps to the full note rate in year 2. The simplest and least expensive buydown — ideal when you want modest first-year relief with a smaller seller concession. Buydown cost is roughly 1% of the loan amount.
1-1 Buydown
Your rate is reduced by 1% for the first two years, then returns to the full note rate in year 3. Provides consistent payment relief for the first two years — ideal for buyers who expect income to grow or rates to drop within two years. Cost is roughly 2% of the loan amount.
2-1 Buydown
Your rate drops by 2% in year 1 and 1% in year 2, returning to the full note rate in year 3. The most popular buydown structure in 2026 — frequently offered by sellers and builders as a purchase incentive. On a $700,000 San Diego loan, a 2-1 buydown at 6.75% note rate costs approximately $16,116 in seller concessions.
3-2-1 Buydown
Your rate drops by 3% in year 1, 2% in year 2, and 1% in year 3, returning to the full note rate in year 4. The most aggressive buydown structure — provides the largest first-year payment reduction but requires the highest seller contribution. Best suited for high-rate environments where buyers need maximum short-term relief.
Who Pays for a Temporary Buydown?
Seller-Paid (Most Common)
In most cases, the seller or builder funds the buydown as a closing cost concession. Instead of dropping the price, the seller deposits the buydown amount into an escrow account at closing. The buyer gets lower payments in the early years — and the seller avoids a permanent price reduction. This is the most common structure in San Diego's 2026 market.
Builder-Paid
Many San Diego and Southern California new-construction builders offer 2-1 buydowns as a standard incentive — pre-funding the buydown escrow from their marketing budget. Always ask your builder if a buydown is available before accepting other incentives.
Quick Answer
What is a temporary mortgage buydown and how much does it cost?
A temporary mortgage buydown reduces a borrower's effective interest rate for the first 1-3 years of a loan by depositing a lump sum subsidy into escrow at closing — typically funded by the seller or builder as a purchase concession. The four most common structures are: 1-0 (rate reduced 1% for year 1), 1-1 (rate reduced 1% for years 1-2), 2-1 (rate reduced 2% in year 1 and 1% in year 2), and 3-2-1 (rate reduced 3% in year 1, 2% in year 2, and 1% in year 3). The total buydown cost equals the sum of all monthly payment savings — cost equals savings. Borrowers must qualify at the full note rate. Cascada Mortgage Advisors, Inc. (NMLS #398944, CA DRE #02206556) structures temporary buydowns for San Diego and Southern California homebuyers.
— Cascada Mortgage Advisors, Inc.
What Our Clients Say
What Our Clients Say
Kensuke Yamamoto
2 weeks ago
This was my second time working with Omar, and once again, he exceeded my expectations. I chose to work with him again because of the excellent experience I had the first time, and he continued to deliver outstanding service. From start to finish, Omar was incredibly responsive, professional, and easy to work with. Whenever I had a question, he replied quickly and always took the time to make sure I fully understood the answer. What really sets Omar apart is how well he guides his clients through the mortgage process. He clearly explained each step, kept me informed about what to expect next, and made sure I always knew where we were in the process. Buying or refinancing a home can be overwhelming, but Omar made everything feel smooth, organized, and stress-free. He was also very efficient and kept everything moving forward without unnecessary delays. I truly appreciated his patience, attention to detail, and commitment to providing exceptional customer service. It’s rare to find someone who is not only knowledgeable and efficient but also genuinely cares about making the experience as easy as possible for their clients. That’s why I came back to Omar a second time, and I wouldn’t hesitate to recommend him to anyone looking for a trustworthy, responsive, and dedicated mortgage broker. Thank you again, Omar, for another outstanding experience!
Lycia Cardoso
4 months ago
We had an excellent experience working with Omar for our HELOAN to secure the down payment on our second home. From start to finish, he demonstrated incredible knowledge and experience in navigating the lending process. He took the time to explain every detail clearly, answered all of our questions, and made sure we fully understood our options. What truly stood out was how committed he was to acting in our best interest as borrowers. He carefully evaluated different scenarios to ensure we were making the smartest financial decision for our family. We never felt rushed or pressured — just genuinely supported. On top of his professionalism, he is friendly, approachable, and easy to communicate with, which made what could have been a stressful process feel smooth and manageable. We are so grateful for his guidance and highly recommend him to anyone looking for a knowledgeable and trustworthy mortgage professional!
Patrick Yrigoyen
9 months ago
Working with Omar to purchase my first investment property was an absolute pleasure. The entire process was quick and painless, thanks to his professionalism and proactive approach. Omar asked for everything he needed upfront, which eliminated the usual back-and-forth and made the experience incredibly smooth. He kept us informed with timely updates and was always available to answer questions. One standout moment was when Omar flagged a property that was underinsured—his advice helped us avoid potential issues that could have surfaced down the line. That level of diligence and care truly sets him apart. If you're looking for a mortgage broker who is thorough, communicative, and genuinely invested in your success, Omar is the one. Highly recommended!
Iris Urvina
9 months ago
Omar is an exceptional broker who truly goes above and beyond. My sister and I were previously stuck in an unfair loan and felt discouraged, thinking we wouldn’t qualify for anything better given our financial situation. Omar took the time to carefully research our options and quickly found a solution that put us in a much better position. He made the entire process clear and stress-free, walking us through every question and detail. Even after closing, he continues to check in and guide us toward our future goals. We’re extremely grateful for his support and expertise!
Amy Genao
11 months ago
Omar was referred to me from multiple friends as a top mortgage broker, and from our first conversation, I could see why. He listened to me patiently, asked insightful questions, and took the time to explain every detail in plain language. What really impressed me was how knowledgeable he is—not just about mortgages, but the broader financial landscape. Omar’s approach is proactive, thorough, and refreshingly human as he’s genuinely invested in helping his clients succeed. I’m grateful for his guidance and would wholeheartedly recommend Omar!
Kensuke Yamamoto
2 weeks ago
This was my second time working with Omar, and once again, he exceeded my expectations. I chose to work with him again because of the excellent experience I had the first time, and he continued to deliver outstanding service. From start to finish, Omar was incredibly responsive, professional, and easy to work with. Whenever I had a question, he replied quickly and always took the time to make sure I fully understood the answer. What really sets Omar apart is how well he guides his clients through the mortgage process. He clearly explained each step, kept me informed about what to expect next, and made sure I always knew where we were in the process. Buying or refinancing a home can be overwhelming, but Omar made everything feel smooth, organized, and stress-free. He was also very efficient and kept everything moving forward without unnecessary delays. I truly appreciated his patience, attention to detail, and commitment to providing exceptional customer service. It’s rare to find someone who is not only knowledgeable and efficient but also genuinely cares about making the experience as easy as possible for their clients. That’s why I came back to Omar a second time, and I wouldn’t hesitate to recommend him to anyone looking for a trustworthy, responsive, and dedicated mortgage broker. Thank you again, Omar, for another outstanding experience!
Lycia Cardoso
4 months ago
We had an excellent experience working with Omar for our HELOAN to secure the down payment on our second home. From start to finish, he demonstrated incredible knowledge and experience in navigating the lending process. He took the time to explain every detail clearly, answered all of our questions, and made sure we fully understood our options. What truly stood out was how committed he was to acting in our best interest as borrowers. He carefully evaluated different scenarios to ensure we were making the smartest financial decision for our family. We never felt rushed or pressured — just genuinely supported. On top of his professionalism, he is friendly, approachable, and easy to communicate with, which made what could have been a stressful process feel smooth and manageable. We are so grateful for his guidance and highly recommend him to anyone looking for a knowledgeable and trustworthy mortgage professional!
Patrick Yrigoyen
9 months ago
Working with Omar to purchase my first investment property was an absolute pleasure. The entire process was quick and painless, thanks to his professionalism and proactive approach. Omar asked for everything he needed upfront, which eliminated the usual back-and-forth and made the experience incredibly smooth. He kept us informed with timely updates and was always available to answer questions. One standout moment was when Omar flagged a property that was underinsured—his advice helped us avoid potential issues that could have surfaced down the line. That level of diligence and care truly sets him apart. If you're looking for a mortgage broker who is thorough, communicative, and genuinely invested in your success, Omar is the one. Highly recommended!
Iris Urvina
9 months ago
Omar is an exceptional broker who truly goes above and beyond. My sister and I were previously stuck in an unfair loan and felt discouraged, thinking we wouldn’t qualify for anything better given our financial situation. Omar took the time to carefully research our options and quickly found a solution that put us in a much better position. He made the entire process clear and stress-free, walking us through every question and detail. Even after closing, he continues to check in and guide us toward our future goals. We’re extremely grateful for his support and expertise!
Amy Genao
11 months ago
Omar was referred to me from multiple friends as a top mortgage broker, and from our first conversation, I could see why. He listened to me patiently, asked insightful questions, and took the time to explain every detail in plain language. What really impressed me was how knowledgeable he is—not just about mortgages, but the broader financial landscape. Omar’s approach is proactive, thorough, and refreshingly human as he’s genuinely invested in helping his clients succeed. I’m grateful for his guidance and would wholeheartedly recommend Omar!
Ready to Explore a Seller-Paid Buydown on Your Purchase?
We'll show you exactly how to structure a buydown request and which program makes the most sense for your San Diego purchase — from our network of 100+ wholesale lenders.
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