Which builder incentive is worth the most?

Builders often offer the same money as a price reduction, closing costs or a lower rate. Compare them on the same home: your first-year payment, cash at closing and total cost over the years you plan to stay.

These numbers are estimates only and may not be accurate. They depend on your real interest rate, credit, income and the home's actual taxes and insurance. Contact us for accurate figures; it's free and there's no obligation. The starting interest rate (6.5%) is an example only, not a quote: your rate depends on your credit, loan type, down payment and the market, and can be higher or lower. Change it to see the difference.

The home and the offer

Price ($)

Incentive amount ($)

Buyer's down payment (%)

Interest rate (%) example

Buyer's closing costs (% of price)

Rate drop per point (%) varies by lender

Years the buyer may keep the loan

Side by side

Option	Monthly payment (P&I)	Buyer's cash at closing	Total cost over the years kept

Total cost = payments over the years kept + cash at closing + loan balance left. Principal and interest only. Limits on contributions apply; the highlighted row costs the least overall.

Common questions

What is a rate buydown?

Money paid at closing to lower the interest rate. A permanent buydown lowers it for the life of the loan, usually about 0.25% for each point (1% of the loan), though this varies. A temporary 2-1 buydown lowers the payment for the first two years only.

Is there a limit on seller or builder contributions?

Yes. Each loan type limits how much a seller or builder can pay toward the buyer's costs, often 3% to 6% of the price (more for VA in some cases), and it can't exceed the buyer's actual costs. We check this for each deal.

Why not just lower the price?

A price cut lowers the loan a little, so the payment drops only slightly. The same money used to buy down the rate or pay closing costs can make a bigger difference to the buyer's monthly payment or cash needed.

For education and planning only. Approximate estimates; not legal, tax or financial advice. Not a loan offer, approval or commitment to lend. Example rates are for illustration only; rates can change and may not be available at commitment or closing. Rates, terms, taxes, insurance and program rules vary and change; your actual numbers may differ. Mortgage services by Bill McElhill, NMLS #2176490, licensed in Florida, Georgia and Texas.

Which builder incentive is worth the most?

The home and the offer

Side by side

Common questions

Your next step

Talk to us before you sign with a builder