A buydown mortgage is a loan that begins at a rate below the existing market rate and then rises, usually every year, at a predetermined amount.

This mortgage calculator calculates your savings from participating in an interest rate buydown program. You can compare your cost to participate — the additional “points that you must pay up front — with your total savings.

Paying these points may or may not make sense for your unique situation, depending on how long you plan to stay in the home and keep the loan.

Simply enter the loan amount and term, the base interest rate, the discounted interest rate, and the points paid to get that rate. Then click Calculate. If the length of time you plan on staying in the home is great than the “Number of Months to Break Even,” then paying points will be beneficial to you.