Price-cut vs. buydown comparison & promo registration
Special financing · Rate buydown
Ask how this home gets to—
Andy Zemon/Novus Home Mortgage and the seller can both put money toward the buyer's rate — which lowers the monthly payment without lowering the price. Put in a price and see what it does.
Purchase price
%
Typical minimum: 3–5% down.
Estimated mortgage insurance included at% per year, while LTV is above 80%.
Sets the VA funding fee below — waived entirely at 10%+ service-connected disability. As entered by the user; not verified against a Certificate of Eligibility.
%
Current base rate assumption. Adjust to match a real quote — your actual rate depends on credit, loan size, and the day you lock.
How this gets funded
Check Include in calculation on a structure in the table to fund it with a seller contribution — the dollars below fill in automatically. Checking a costlier structure covers every cheaper one too, so they'll show as included as well.
Andy Zemon / Novus contributes$0
Seller contributes% = $0
Free lender-paid buydown—
Included free · Oct 1 – Dec 31, 2026
Include free Lender-Paid 1-0 (Inflation Buster promo)
On any purchase contract ratified between October 1 and December 31, 2026 that closes by December 31, 2026 — no cost to anyone, no rate change, automatically on by default.
Standard assumption: 0.72% of purchase price per year. Edit to override.
Standard assumption: 0.50% of purchase price per year. Edit to override.
Year-one rate · 2-1 buydown
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$0/mo estimated total payment
Covered by a special financing incentive from the seller and Andy Zemon/Novus Home Mortgage — not money you pay. Your payment moves to the note rate afterward.
Note rate 7.500% · est. APR —% (assumes 1 point + lender fees)
Loan amount
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Buydown budget
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Payment after buydown
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at the full note rate
What this money buys — pick a structure
Click a box to select it. The dollar figure under the structure name is what's left after Andy Zemon/Novus's fixed contribution.
Free Lender-Paid 1-0 is on, so every structure below is SPLIT funded: Andy Zemon/Novus's Inflation Buster promo credit pays for the first 1% off in year one — $0 cost, no rate change, and it doesn't count against interested-party contribution limits. The seller funds whatever's left of that structure's schedule in cash, and only that cash portion counts against the limits. The buyer's payment schedule is identical either way — only who's paying, and how, changes.
USDA only offers 2-1 and 1-0 here: USDA Guaranteed loans cap the maximum year-one rate reduction at 2% off the note rate, which rules out a 3-2-1 (starts at -3%) — and USDA does not permit a lender-funded or split-funded buydown, so it must be entirely seller-paid.
1-0 vs. 1-1 — what's the difference? A 1-0 buydown lowers the rate by 1% for year one only, then jumps straight to the full note rate in year two. A 1-1 buydown lowers the rate by 1% in both year one and year two — the same size discount, but held for twice as long — then jumps to the full note rate in year three. Because the relief lasts twice as long, a 1-1 costs roughly double what a 1-0 costs to fund.
Payment schedule
Selected structure, year by year.
Period
Rate
Payment
Monthly saving
Who's actually paying for this, year by year
This is a SPLIT-funded buydown. Every year below is paid for two different ways — this table shows exactly which dollars come from Andy Zemon/Novus's Inflation Buster promo credit ($0 cost to anyone, no rate change, doesn't count against interested-party contribution limits) and which come from the seller in cash (does count against those limits).
Scroll to see all columns
Year
Total rate discount
From Andy Zemon/Novus (rate-funded, $0 cash)
From the seller (cash contribution)
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Buydown vs. a straight price cut — every option
Same total dollars, two different jobs: lowering the payment vs. lowering the price.
Scroll to see all columns
Structure
Total cost
Buydown saves
Price-cut saves
Buydown advantage
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"Price-cut saves" recalculates the payment as if that same total cost were taken off the purchase price instead — same down-payment percentage, same note rate, just a smaller loan.
Same savings, priced two other ways
For the selected structure — what it would take to match its savings without a temporary buydown.
Equivalent price cut
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A permanent price reduction of this size saves the buyer the same amount over the buydown period — but it's public, permanent, and re-anchors every future offer lower.
Monthly savings—
Equivalent permanent rate cut
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A permanent note-rate reduction of this size saves the same amount over the buydown's own period — but it lasts for the life of the loan, not just that period.
Equivalent rate—
How this works — 90 seconds
Andy walks through what the contribution does to the payment, and why a seller would rather fund a buydown than cut the price.
For the listing agent
Settled on a structure? Take the same numbers straight into a flyer — no retyping.
The flyer will open with the price, structure, and rate shown above. Add the photos there.
The money sits in escrow and covers the gap. Nothing about the loan itself changes.
1
Money goes into escrow
A lump sum is set aside at closing — funded by the seller, the lender, or both. It is not added to the loan.
2
Payments start lower
For the first year or two the buyer pays as if the rate were lower. The escrow account covers the difference each month.
3
Full rate resumes
Once the escrow runs out, the payment steps up to the note rate for the rest of the loan. It's on the schedule from day one.
Temporary or permanent?
Two different tools. The right one depends on how long the buyer plans to keep the loan.
Temporary buydown
Lowest payment early
Buys the biggest visible rate drop per dollar — this is how you get a headline number.
The payment steps back up on a published schedule.
The buyer still qualifies at the full note rate, so it lowers what they pay, not what they can borrow.
Unused escrow is generally credited if the loan pays off early.
Best when the buyer expects income to rise, or expects to refinance.
Permanent buydown
Lower rate for the life of the loan
Discount points cut the note rate itself, permanently.
Costs more per point of rate reduction than a temporary buydown.
It lowers the qualifying rate too — this is the one that widens who can actually buy the home.
Nothing to run out and nothing to step up.
Best when the buyer plans to hold the loan for years.
Permanent pricing moves daily and depends on the file, so this calculator models the temporary structures, where the cost is exact. Call for live permanent pricing — often the strongest answer is a split of both.
Questions
The ones that come up every time.
Who pays for the buydown?
Andy Zemon/Novus Home Mortgage contributes up to the amount shown above. The seller then negotiates their share on top. It can also be funded by a builder, or by the buyer. The seller's portion is agreed per property and written into the contract — it is not automatic and not a standing offer on every home.
Does this raise the price of the house?
Sometimes a seller lists slightly higher to fund their share, and sometimes they fund it out of the existing price. Either way the buyer sees the price and the credit in the contract. What a buydown avoids is a public price reduction, which is why sellers often prefer it.
Is a temporary buydown the same as buying points?
No. Discount points permanently reduce the note rate for the life of the loan. A temporary buydown leaves the note rate alone and subsidizes the payment for the first year or two from an escrow account. Points cost more; a temporary buydown buys a bigger visible drop for less money, but it does not last.
What rate do I qualify at?
The full note rate, not the reduced year-one rate. That's the part people get wrong. A temporary buydown lowers what you pay in the early years; it does not increase how much you can borrow. A permanent buydown does lower the qualifying rate.
What if I sell or refinance during the buydown?
Funds left in the buydown escrow are generally applied to the payoff, so the unused portion is not lost. The exact treatment is set by the buydown agreement on your specific loan — ask before you assume.
Which loans allow a temporary buydown?
Conventional, FHA and VA all permit temporary buydowns, subject to program rules and occupancy restrictions. Contribution limits differ by program and by how much you put down. We confirm what a specific file allows before anything goes into a contract.
Why would a seller pay for this instead of dropping the price?
A price cut moves the monthly payment surprisingly little. The same money aimed at the rate moves it a lot more — so the home reaches buyers who were shopping below the price. It also avoids a public reduction and the days-on-market story that follows one.
I'm the listing agent. Can I run this for my seller?
That's exactly what this is for. Put in the list price and the contribution you think the seller would consider, and it shows the payment story you can take to them. For the full picture — net proceeds, price-cut comparison, contribution limits — call and we'll build it on the actual property.
Run it on a real property
Send an address and a price and Andy will model the financing scenario against a straight price reduction, so you and your seller can see both.
Last revised: September 28, 2026. Figures, program rules, and assumptions on this page are current as of that date and are reviewed periodically — always confirm against current rate, program, and compliance guidance before using with a client.
Estimates for illustration only. This is not a loan approval, a commitment to lend, an offer to extend credit, or a Loan Estimate. Payments shown are estimates built from the figures entered above and include principal, interest, estimated property taxes, estimated homeowners insurance, estimated mortgage insurance where applicable, and any HOA amount entered. They exclude items that vary by transaction. The market rate shown is the Freddie Mac Primary Mortgage Market Survey® 30-year fixed national average, published weekly, shown here as a starting assumption — it is a market average, not a quoted or locked rate, and not an offer of credit. Actual interest rate and APR depend on credit score, loan amount, occupancy, property type, loan program, and market conditions at the time of lock, and are subject to change without notice. APR shown is estimated for comparison, computed using the Regulation Z actuarial method (12 CFR 1026, Appendix J) at the note rate, against an amount financed equal to the loan amount less 1 discount point and a $1,995 lender underwriting/processing fee, with mortgage insurance included until the scheduled balance reaches 80% loan-to-value. This calculation does not assume or reflect any temporary interest rate buydown for purposes of APR disclosure; per Regulation Z Official Interpretations, 12 CFR 1026.17(c)(1), comment 3, a seller- or third-party-funded temporary buydown not incorporated into the credit contract is not reflected in disclosed APR. Full methodology: andyzemon.com/buydown-agent/methodology.html. The "Lender-Paid 1-0" option is a free, $0-cost payment subsidy for Year 1, funded by Andy Zemon/Novus Home Mortgage instead of the seller — like the other structures on this page, it does not change the note rate or the estimated APR shown; the loan accrues interest at the full note rate for the entire term. It is available only under the same conditions as the Inflation Buster Buydown promotion: a purchase transaction with a ratified contract between October 1, 2026 and December 31, 2026 that closes before midnight on December 31, 2026. Outside that window, uncheck "Include free Lender-Paid 1-0 (Inflation Buster promo)" above and fund any buydown with seller cash instead. Interested-party contribution limits shown reflect standard Fannie Mae/Freddie Mac conventional tiers by LTV (3%/6%/9% for a primary residence or second home), a flat 6% for FHA, a flat 6% for USDA, and a flat 4% for VA (calculated against the appraised value on the VA Notice of Value, approximated here with purchase price); all are illustrative — actual limits depend on occupancy, investor overlays, and program-specific rules, and are confirmed per file. On a VA loan, a seller- or builder-funded temporary buydown counts against that 4% cap; the free Lender-Paid 1-0 does not, since no cash changes hands. FHA loans here model a 1.75% upfront mortgage insurance premium (UFMIP), financed into the loan amount, plus an annual MIP defaulting to 0.55% (0.50% at 5%+ down, editable) applied for the full term shown; most FHA loans actually cancel MIP after 11 years if the original down payment was 10% or more, which this simplified tool does not calculate — confirm the real cancellation date per file. USDA Guaranteed loans here model a 1% upfront guarantee fee, financed into the loan amount, plus a fixed 0.35% annual fee that does not vary by down payment and does not drop off at any LTV; USDA also caps the maximum year-one rate reduction at 2%, so only the 2-1 and 1-0 structures are offered, and only as a seller-paid contribution — USDA does not permit a lender-funded or split-funded buydown. VA loans carry no monthly mortgage insurance but do carry a one-time VA funding fee, modeled here using the funding fee table in effect since the January 2020 law equalizing rates across Regular Military, Reserves, and National Guard (2.15% first use / 3.30% subsequent use with no down payment, 1.50% at 5%+ down, 1.25% at 10%+ down; 0% when the disability-exemption toggle is set to yes), financed into the loan amount. For FHA and USDA, the annual MIP/guarantee-fee rate shown is applied against the total financed loan balance (including that program's own upfront fee) rather than the base loan amount HUD's precise method carves out for FHA — a simplification that typically overstates the true annual premium by only a few dollars a month. The loan-program selection and, on a VA loan, the first-time-use and disability-exemption toggles are exactly as entered by the user — not verified against a Certificate of Eligibility, case number assignment, or automated underwriting findings — so confirm actual eligibility, exemption status, and every fee amount before any of this is disclosed to a borrower. Temporary buydowns are subject to agency and program guidelines, occupancy restrictions, and interested-party contribution limits; seller contributions are negotiated per transaction, must be supported by appraised value, and cannot exceed eligible borrower costs. Lender contribution availability is subject to program terms and may change. Nothing here is tax or legal advice.
Andrew Zemon · NMLS #208916 · Novus Home Mortgage, a division of Ixonia Bank · 5405 Ashlar Ave, Suite 101, Crozet, VA 22932 · Branch NMLS #423065 · NMLS Consumer Access · Equal Housing Opportunity. All loans subject to credit and property approval.
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