Understanding Closing Costs
In today’s fluctuating economy, Canadian homeowners are increasingly looking at refinancing their mortgages
This Page’s Content Was Last Updated: March 2026
This Page’s Mortgage Rates Were Last Updated: March 11, 2026 2:23 AM ET
A Mortgage Buydown Calculator helps homebuyers and homeowners estimate how temporary or permanent rate buydowns impact their monthly mortgage payment and overall loan affordability. By adjusting the interest rate, buydown period, and loan terms, borrowers can see how upfront discount points or seller-paid buydowns reduce payments in the early years of the mortgage.
Simply Approved Mortgages provides this calculator to help clients evaluate payment savings, compare financing strategies, and structure offers that maximize affordability.
A mortgage buydown reduces your interest rate either temporarily (like a 2-1 buydown) or permanently (via discount points). Use our calculator to compare payment savings and long-term cost.
Our Buydown Calculator helps you compare:
• Standard mortgage payment
• 2-1 temporary buydown payments
• 1-0 buydown structure
• Permanent rate reduction via discount points
• Total interest paid over time
• Break-even timeline
You can adjust:
• Loan amount
• Interest rate
• Loan term
• Buydown structure
• Points purchased
The calculator shows both short-term savings and long-term impact.
Disclaimer: Advertised rates and fees depend on borrower qualifications and market fluctuations.
A 2-1 buydown is a temporary rate reduction:
Year 1: 2% lower
Year 2: 1% lower
Year 3+: Full note rate
Example:
Base rate: 6.5%
Year 1: 4.5%
Year 2: 5.5%
Year 3+: 6.5%
The difference is typically funded by the seller or builder at closing.
Learn More: 👉 2 in 1 Buydown
At Simply Approved Mortgages, we operate with a 1.5% fee, significantly below the industry standard. This ensures more savings for borrowers without compromising service quality.
Disclaimer: Simply Approved Mortgages complies with all state and federal licensing requirements that we are licensed in.
A 1-0 buydown reduces your rate by:
• 1% in Year 1
• Full note rate starting Year 2
Often used when buyers expect:
• Income growth
• Refinance opportunity
• Short-term payment relief
Discount points are prepaid interest used to permanently lower your interest rate.
1 point = 1% of loan amount.
Example:
$400,000 loan
1 point = $4,000
This may reduce your interest rate by 0.25%–0.50%, depending on market conditions.
| Feature | Temporary Buydown | Discount Points |
|---|---|---|
| Rate Reduction | Temporary | Permanent |
| Upfront Cost | Often seller-paid | Buyer-paid |
| Best For | Short-term relief | Long-term savings |
| Break-Even | Immediate | Requires time |
At Simply Approved Mortgages, we offer a wide range of mortgage products tailored to meet your needs:
👉 Explore these options today and find the perfect mortgage solution for your needs!
With our industry-leading 1.5% fee, compared to the standard 2.75%, we save you thousands while offering competitive rates tailored to your needs. Learn More.
Our team of seasoned professionals is dedicated to simplifying the mortgage process, providing personalized solutions, and ensuring you feel confident every step of the way.
We prioritize honesty and clarity. From disclosing every detail upfront to ensuring no hidden surprises, we build trust through our commitment to your financial success.
You can also get help from a Home Loan Expert.
A buydown is when funds are used to lower your interest rate temporarily or permanently.
It depends on how long you plan to keep the loan.
Often the seller, builder, or lender through concessions.
Yes, depending on program guidelines.
Does a buydown reduce total interest?
Take control of your home-Take the guesswork out of your home-buying journey. Use our Mortgage Calculator to estimate your monthly payments and make informed financial decisions.
Start Now:
Simply input your details and see how much equity you could access today. If you have questions or need assistance, our team is here to guide you every step of the way.
Get a free credit score check to understand where you are and how to move forward.
Small changes in your credit score can lead to significant savings on your mortgage.
Stay on top of your credit health with credit monitoring, so you can catch issues early and maintain a strong score.
Discover how your credit score affects your mortgage options and rates. Plus, get personalized offers through our partner services to help you find the best loan for your financial situation.
Powered by our credit monitoring partner at Myfreescorenow.
No credit card is needed to sign up.
Remember that a good credit score can lower your interest rate on your mortgage.
In today’s fluctuating economy, Canadian homeowners are increasingly looking at refinancing their mortgages
In today’s fluctuating economy, Canadian homeowners are increasingly looking at refinancing their mortgages
In today’s fluctuating economy, Canadian homeowners are increasingly looking at refinancing their mortgages
Reduce your monthly payment or loan term while unlocking the full potential of your home’s equity!