Buydown vs. Price Cut Calculator

It’s not the price.
It’s the payment.

Your pain isn’t the sticker on the house — it’s the check you write every month. So take the seller’s dollars and aim them where the pain lives. The same seller credit, written two ways: a price cut shaves a little off the payment forever. A buydown slashes the payment in the first years — the years money is tightest. Run your own numbers below.

Option 1 · Baseline

No concession

Full loan amount at the full note rate. What you pay if the contract asks for nothing.

—/mo

On the full — loan at —. This is the payment the other two options are measured against.

Option 2 · The usual ask

Price reduction

The seller’s dollars come off the price, so the loan gets smaller — at the same full rate.

—/mo

Loan drops to —. Lower every month for 30 years — but look how little it moves.

—

Option 3 · The payment play

3-2-1 Buydown

Same seller dollars buy the rate down instead. Full loan amount, stepped payments:

Year	Rate	P&I / mo	You save

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The honest part: what the buydown really costs

A buydown isn’t free and it isn’t magic — someone pre-pays the difference between the full-rate payment and the bought-down payment. Here’s the true cost, and exactly how far the seller’s credit stretches. That gap is what you size the credit ask to in the offer.

True cost of the 3-2-1

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Seller credit covers

—

Shortfall (buyer-funded)

—

The math only works if the contract is written right.

Erik Walbot is a Scottsdale REALTOR^® with 25 years and hundreds of closings across the Valley — who also holds the mortgage side as a Mortgage Strategist · AIO Specialist. One person who sees both sides of the deal: the home, and the loan on it.

His specialty is the part a calculator can’t do: negotiating the seller credit and writing the offer so the dollars land where they cut your payment the most — structured buydowns instead of cosmetic price cuts, credits sized to each loan program’s concession limits, and terms written to put you in the best financial position from day one.

EducationHe knows how buydowns are actually funded, what each loan program allows, and where the payment is really won or lost.

AwarenessHe reads the seller, the market, and the numbers at the same time — so the ask is aimed, not guessed.

ExperienceTwenty-five years of negotiating Valley contracts, applied at the table on every offer he writes.

Same seller. Same dollars. Very different first years.

A price cut spreads the seller’s money so thin you’ll never feel it — a few dollars a week, forever. A buydown concentrates those same dollars into the years when you’re also paying movers, furniture, and everything else a new house demands. That’s not a lender trick. It’s how the contract is written — and it’s decided before you ever sign.

One caution, stated plainly: a buydown is temporary. The payment steps up on a fixed schedule until it reaches the full note-rate payment. Budget for the full payment from day one, and the step-ups are a plan — not a surprise.