Compare any two purchase scenarios side by side — whether it's a price reduction, a seller concession, or a seller-funded rate buydown — and find out exactly how the monthly payment and long-term cost stack up.
Enter the details for each scenario below. Each scenario is fully independent — compare any combination of purchase price, seller concession, or rate buydown. Results update instantly.
Enter the purchase price and loan terms
Note: This calculator reflects principal & interest only. A change in purchase price also affects property taxes, homeowner's insurance, and (if applicable) PMI — all of which are typically based on the home's value. These additional costs should be factored into your total monthly budget.
Seller credit applied to permanently reduce the rate
Enter the dollar amount of the seller concession applied to the rate buydown.
Note: This calculator reflects principal & interest only. A change in purchase price also affects property taxes, homeowner's insurance, and (if applicable) PMI — all of which are typically based on the home's value. These additional costs should be factored into your total monthly budget.
Here's exactly how your two scenarios stack up — monthly payment, total interest, and the breakeven timeline.
The seller credit of $10,000 reduces the rate by 0.568%, saving $166/month. At that rate, you recoup the full cost in 5 yrs.
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A permanent rate buydown (also called "buying points" or "discount points") is an upfront payment made at closing that permanently lowers your mortgage interest rate for the life of the loan.
In a negotiated transaction, a seller may offer a seller credit or concession — money applied toward closing costs or a rate buydown — as part of the deal. A buyer can negotiate to apply this credit specifically to purchase discount points.
The industry rule of thumb is that 1 point = 1% of the loan amount, and each point typically reduces the rate by approximately 0.25%. Actual results vary by lender and market conditions.
The breakeven period is the most critical factor in evaluating a rate buydown. It answers: "How many months must I stay in this home before the monthly savings exceed the upfront cost?"
If you plan to stay longer than the breakeven period, the buydown is financially advantageous — you'll save money every month after that point.
If you may move, sell, or refinance before the breakeven date, the upfront cost won't be recouped and the alternative scenario may be the smarter choice.
Each discount point costs 1% of the loan amount and typically reduces the rate by ~0.25%. On a $400,000 loan, 1 point = $4,000 upfront.
A typical breakeven period ranges from 3–7 years. The larger the credit and the higher the monthly savings, the faster you recoup the cost.
A lower purchase price also reduces property taxes, homeowner's insurance, and PMI — costs tied to home value that aren't captured in the P&I payment alone.
For Informational Purposes Only
This calculator is provided for general informational and educational purposes only. It does not constitute financial, legal, mortgage, or investment advice. All calculations reflect principal and interest only and are estimates based on the inputs provided and standard industry approximations (1 discount point ≈ 0.25% rate reduction per 1% of loan amount). A change in purchase price may also affect property taxes, homeowner's insurance premiums, and private mortgage insurance (PMI), which are not reflected in these calculations. Actual mortgage terms, interest rates, discount point costs, lender fees, and eligibility requirements will vary based on your creditworthiness, loan type, lender, and current market conditions. The breakeven analysis assumes the loan is maintained without refinancing or early payoff through the breakeven date. Past performance does not guarantee future results. Results will vary based on individual circumstances. Consult a licensed mortgage professional, financial advisor, or real estate attorney before making any real estate, mortgage, or financing decisions.
Stout Team at eXp Realty · DRE#01882341