A buydown is a tool used in real estate to temporarily lower the interest rate on a mortgage. This is typically paid for by the seller or a builder to make the home more affordable for the buyer in the initial years of the loan. This calculator helps you understand the cost and impact of a buydown.
.calculator-container {
font-family: sans-serif;
max-width: 600px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ddd;
border-radius: 8px;
background-color: #f9f9f9;
}
.calculator-container h2 {
text-align: center;
color: #333;
margin-bottom: 20px;
}
.calculator-inputs {
display: grid;
grid-template-columns: repeat(auto-fit, minmax(250px, 1fr));
gap: 15px;
margin-bottom: 20px;
}
.form-group {
display: flex;
flex-direction: column;
}
.form-group label {
margin-bottom: 5px;
font-weight: bold;
color: #555;
}
.form-group input {
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
box-sizing: border-box; /* Include padding and border in the element's total width and height */
}
button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
cursor: pointer;
font-size: 16px;
transition: background-color 0.3s ease;
}
button:hover {
background-color: #0056b3;
}
.calculator-result {
margin-top: 25px;
padding: 15px;
border: 1px solid #e0e0e0;
border-radius: 4px;
background-color: #fff;
font-size: 1.1em;
color: #333;
text-align: center;
}
function calculateBuydown() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var currentRate = parseFloat(document.getElementById("currentRate").value);
var buydownRate = parseFloat(document.getElementById("buydownRate").value);
var buydownYears = parseFloat(document.getElementById("buydownYears").value);
var buydownCostPercentage = parseFloat(document.getElementById("buydownCostPercentage").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(loanAmount) || isNaN(currentRate) || isNaN(buydownRate) || isNaN(buydownYears) || isNaN(buydownCostPercentage)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (loanAmount <= 0 || currentRate < 0 || buydownRate < 0 || buydownYears <= 0 || buydownCostPercentage = currentRate) {
resultDiv.innerHTML = "Buydown rate must be lower than the current market rate.";
return;
}
var totalBuydownCost = (loanAmount * buydownCostPercentage) / 100;
var monthlyBuydownSavings = 0;
var totalBuydownSavings = 0;
// Calculate monthly payment at current rate
var monthlyRateCurrent = (currentRate / 100) / 12;
var numberOfPaymentsCurrent = 30 * 12; // Assuming a 30-year mortgage
var monthlyPaymentCurrent = loanAmount * (monthlyRateCurrent * Math.pow(1 + monthlyRateCurrent, numberOfPaymentsCurrent)) / (Math.pow(1 + monthlyRateCurrent, numberOfPaymentsCurrent) – 1);
// Calculate monthly payment at buydown rate
var monthlyRateBuydown = (buydownRate / 100) / 12;
var monthlyPaymentBuydown = loanAmount * (monthlyRateBuydown * Math.pow(1 + monthlyRateBuydown, numberOfPaymentsCurrent)) / (Math.pow(1 + monthlyRateBuydown, numberOfPaymentsCurrent) – 1);
// Calculate savings during buydown period
if (monthlyPaymentBuydown > 0 && monthlyPaymentCurrent > 0) {
monthlyBuydownSavings = monthlyPaymentCurrent – monthlyPaymentBuydown;
totalBuydownSavings = monthlyBuydownSavings * buydownYears * 12;
}
var resultHtml = "
Buydown Analysis
";
resultHtml += "Total Buydown Cost: $" + totalBuydownCost.toFixed(2) + "";
resultHtml += "Monthly Payment (Current Rate): $" + (isNaN(monthlyPaymentCurrent) ? "N/A" : monthlyPaymentCurrent.toFixed(2)) + "";
resultHtml += "Monthly Payment (Buydown Rate): $" + (isNaN(monthlyPaymentBuydown) ? "N/A" : monthlyPaymentBuydown.toFixed(2)) + "";
resultHtml += "Monthly Savings during Buydown: $" + (isNaN(monthlyBuydownSavings) ? "N/A" : monthlyBuydownSavings.toFixed(2)) + "";
resultHtml += "Total Savings over " + buydownYears + " Year(s): $" + (isNaN(totalBuydownSavings) ? "N/A" : totalBuydownSavings.toFixed(2)) + "";
// Determine if the buydown is beneficial based on cost vs savings
var netBenefit = totalBuydownSavings – totalBuydownCost;
if (netBenefit > 0) {
resultHtml += "The buydown appears to be financially beneficial, with an estimated net gain of $" + netBenefit.toFixed(2) + " over the buydown period.";
} else if (netBenefit < 0) {
resultHtml += "The buydown cost exceeds the estimated savings during the buydown period. Consider the non-financial benefits.";
} else {
resultHtml += "The buydown cost is equal to the estimated savings during the buydown period.";
}
resultDiv.innerHTML = resultHtml;
}