Temporary buydown calculator for Texas VA buyers
Texas builders often advertise a 2-1 buydown on new homes. Here’s what that offer is worth, and how much of the seller’s 4% it uses.
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A temporary buydown lowers your interest rate for the first one to three years. The seller or builder pays for it at closing. That money goes into an account that covers part of your payment each month until the buydown ends and the payment settles at the full note rate.
You see these offers all over new construction around Austin, San Antonio, Houston and Dallas–Fort Worth. Enter the home and loan below to see the yearly payments, the total cost and how it fits VA’s concession rules.
Temporary buydown calculator
| Year | Rate | Monthly P&I | Saves |
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A temporary buydown is usually paid by the seller or builder as a closing credit. That money goes into an account that covers part of your payment each month during the buydown years. If you refinance or sell before it ends, leftover funds are typically applied to your loan balance; confirm the details with your loan officer. Principal and interest only. The rate is an example, not a current offer. Estimate only.
For illustration only. Results are estimates based on the numbers you enter and general assumptions, and may not reflect your situation. This is not a Loan Estimate, pre-approval, rate quote or commitment to lend. Any rate shown is an example, not a current rate or an offer. Your actual eligibility, loan amount, rate, payment and costs depend on your credit, income, property, appraisal and underwriting, and can change without notice. Not all applicants qualify. CrossCountry Mortgage, LLC NMLS #3029. Equal Housing Opportunity. Full disclaimer.
Builder buydown or a lower price?
A buydown helps most when the early years are tight, for example while a spouse finds work after a move, or until a promotion lands. If you plan to stay a long time, ask what the same money would do as a price cut or a permanent rate buydown. Since the cost of a temporary buydown is spent in the first few years, compare the total savings, not just year one.
VA’s 4% concession limit
On a VA purchase, seller concessions are capped at 4% of the price. A seller-paid buydown counts toward that 4%, alongside things like paying off a buyer’s debt or covering the funding fee. Normal closing costs the seller pays for you don’t count. The calculator checks the buydown against the cap so you know how much room is left.
You qualify at the full note rate, not the year-one rate, so make sure the full payment fits. The DTI and residual income calculator will tell you.
Questions Texas veterans ask
Can a builder pay for a buydown on a VA loan?
Yes. Builder and seller buydowns are allowed on VA purchase loans, as long as the total of all seller concessions stays within 4% of the price.
What happens if I refinance or sell before the buydown ends?
Any money left in the buydown account is typically applied to your loan balance. Confirm how your specific loan handles it before closing.
Is a 2-1 or a 3-2-1 better?
A 3-2-1 saves more but costs more, and on a larger Texas loan it can run past the 4% limit. A 2-1 is the most common builder offer because it usually fits.
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