Follow the default numbers.
With buyer loan amount of $400,000, the model gives required buydown subsidy: $9,323.
The formula is subsidy = sum of temporary payment shortfalls. Open the breakdown to trace expenses and assumptions. Change one input at a time to see how your decision changes. This example uses scenario inputs; it is not an offer, tax bill, appraisal or legal determination.
A temporary subsidy does not change the note rate
A 2-1 structure illustrates payments two percentage points below the permanent note rate in year one and one point below in year two. A 3-2-1 structure adds a three-point first year. The permanent loan payment and amortization stay tied to the note rate. The subsidy account covers the difference; the borrower still has the underlying note obligation.
Subsidy cost is the payment shortfall
The estimate sums twelve months of the difference between the permanent payment and each illustrated temporary payment. Rates are floored at zero. It excludes lender program fees and assumes full annual periods. The result is a seller contribution scenario, subject to program eligibility and concession limits, not a lender offer.
Compare the price-cut mechanism
The comparison assumes the entered reduction lowers loan principal by that same amount while leaving rate and term unchanged. That may differ from a transaction where down payment is held as a percentage of price. A price cut can affect valuation, seller proceeds and buyer cash. A buydown gives larger early payment relief but ends; compare both the temporary and permanent payment.
Keep your assumptions with the result
Save the calculation to your deal file to reuse compatible inputs in another tool. The file stays in this browser on this device. Download the CSV to open the complete inputs, results and schedule in Excel or Google Sheets. Use PDF to print the report or save it as a PDF. A share link includes entered financial figures in its URL, so use it only with people you intend to share those numbers with.