Wealth Tools
Builder Incentive Comparison
Builders love to offer either a rate buydown or a closing-cost credit. They are not the same deal — see both side by side.
Your scenario
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Both options assume the same loan amount of $405,000 on a 30-year fixed, with estimated taxes and insurance of $825 per month.
Option A
Rate buydown to 5.500%
$3,125
Estimated monthly payment
Principal & interest
$2,300
Monthly savings
$327
Lifetime savings (360 mo)
$117,820
Option B
Closing credit at 6.750%
$3,452
Estimated monthly payment
Principal & interest
$2,627
Cash back at closing
$10,000
Monthly savings
$0
How to read this
The buydown lowers your payment for as long as you keep the loan — here that's $327 a month, or about $117,820 over a full 30-year term. The closing credit doesn't change your payment at all; it simply reduces the cash you need on closing day by $10,000. If you're staying put and payment is the pressure point, the buydown usually wins. If cash to close is what's standing between you and the house, the credit is the better trade.