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Mortgage Tools · Florida Buyers

The Payment Shock Calculator.

A 2-1 buydown feels great in year one. Year three is the payment you actually signed up for. The same goes for an ARM when it resets. This tool shows your monthly payment in every phase and the exact dollar jump when the temporary rate goes away, so you qualify yourself against the real number, not the teaser.

Your loan
A buydown temporarily lowers your rate for the first few years. An ARM resets after a fixed intro period.
The financed amount, not the purchase price.
The full rate your loan amortizes at. The buydown discounts this for the first year or two.
Total amortization period.
Your payment shock at reset
$0/mo jump
This is how much your monthly principal and interest rises when the temporary rate ends.
Principal and interest only. Your full payment also includes property tax, insurance, and any HOA or CDD fees, which this figure does not include.
Starting payment (year 1)
$0/mo
Your principal and interest while the temporary rate is in effect.
Permanent payment (note rate)
$0/mo
The payment you make once the buydown ends. Qualify yourself against this number.
Payment by phase
PhaseRateMonthly P&I
Total buydown subsidy
$0
What the builder or seller funds to cover the discount. It is priced into the home, so it is not free.

The teaser payment is not your payment.

Builders lean on buydowns when rates are high because a low first-year payment sells homes. A 2-1 buydown drops your rate 2 points in year one and 1 point in year two, then snaps to the full note rate in year three. The loan amortizes at the note rate the entire time, so nothing about your debt actually got cheaper. A lump sum sits in escrow and covers the gap between the teaser payment and the real payment. When that fund runs dry, your payment jumps to the number you were always going to pay.

That jump is the whole point of this tool. The mistake is qualifying yourself on the year-one payment, the one the builder advertises, and discovering the year-three payment is several hundred dollars higher than you budgeted. Enter your loan and note rate above and the calculator shows every phase plus the exact dollar increase at reset. If the permanent payment is comfortable, the buydown is a nice head start. If it is not, the buydown is hiding a home you cannot afford yet.

How the math works.

Each phase payment is a standard amortization of your full loan amount over the full term, just at that phase's rate. Year one of a 2-1 uses your note rate minus 2 points, year two minus 1 point, year three and beyond the note rate itself. The shock is the difference between the final payment and the last discounted payment. The total subsidy is the sum of every monthly discount across the buydown period, which is what the builder or seller pays into escrow. We compute it all from your numbers, so there is nothing to look up and nothing assumed.

ARM reset works the same way.

Switch the scenario to ARM reset and the tool fixes your start rate for the intro period, then re-amortizes your remaining balance over the remaining term at the reset rate you enter. Use your fully indexed rate (index plus margin) for a realistic estimate, or a higher stress-test rate to see the worst case. The reset payment is what you owe after the adjustment, and the shock is the jump from your intro payment. If rates rose since you locked, this is where it shows up.

What this does not include.

These figures are principal and interest only. Your actual monthly housing cost in Florida also carries property tax, homeowners insurance, flood insurance where required, and any HOA or CDD fees, which together often rival the loan payment itself. Pair this with the mortgage payment calculator, your county property tax page, the insurance savings calculator, and the CDD and carrying cost calculator to see the full number.

Common questions.

What is a 2-1 buydown?
A temporary rate reduction, usually paid by the builder or seller. Year one is 2 points below the note rate, year two is 1 point below, and year three on is the full note rate. The loan amortizes at the note rate the whole time. The discount comes from an upfront subsidy in escrow, not a lower loan, so when it runs out your payment jumps to the real note-rate payment.
What happens to my payment after the buydown ends?
It rises to the full note-rate payment, the payment you were always going to make. On a 2-1, the year-two to year-three jump can be several hundred dollars a month because year two was still a point below the note rate. The calculator shows the exact increase for your loan, so you see the final payment before you sign.
Is a builder buydown a good deal?
It can be, if you treat it as a short-term subsidy, not a lower rate. It helps early cash flow, which matters if you expect income to rise or plan to refinance. The risk is buying a home whose true payment you cannot comfortably afford once the buydown ends. Qualify against the final payment, not the teaser. The subsidy is priced into the home, so it is not free.
What is payment shock on an ARM?
The jump when an adjustable-rate mortgage leaves its fixed intro period and resets to the market rate. The new payment is calculated on your remaining balance over the remaining term at the reset rate. If rates rose since you closed, the increase can be large. Use the ARM scenario above to stress-test it before the adjustment hits.

Disclaimer: This calculator estimates principal and interest using standard mortgage amortization on the inputs you provide. It does not include property tax, insurance, HOA or CDD fees, PMI, or closing costs, and it is not a loan offer, a rate quote, or financial advice. Buydown structures and ARM terms vary by lender; confirm the exact terms, caps, and index with your loan officer. Momentum Realty is a licensed real estate brokerage, not a mortgage lender.

Looking at a new-construction home with a builder buydown?

Talk to Jon or Brittany before you sign. We will pencil out the real year-three payment with taxes and insurance on the specific home, and tell you straight whether the price holds up.

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