Finance category
Mortgage, loan, investing, tax, and money calculators.
Seller-Paid Closing Cost Calculator
Decide how to use a seller credit: take it as closing-cost cash now, or apply it to a permanent rate buydown for life-of-loan savings. Compare both side by side.
Lifetime benefit
$9,000
used for closing costs
Net closing costs
$3,500
cash you bring
Monthly payment
$2,694
baseline
Rate reduction
—
if used for buydown
How to use a seller credit
Seller credits typically cover closing costs OR fund a rate buydown — not both. Cash-now is best when you're tight on closing cash. Rate buydown wins when you'll keep the loan long enough for monthly savings to exceed the closing-cost cash hit.
Rule of thumb: 1 point typically buys 0.25% rate reduction. So $9,000 on a $405,000 loan ≈ 2.2 points ≈ 0.55% rate cut. Run break-even months: closing-cost savings divided by monthly payment savings.
How to Use
- Enter purchase price, down payment, rate, and term.
- Enter your estimated total closing costs.
- Enter the seller credit you've negotiated.
- Toggle between 'use for closing costs' and 'use for rate buydown' to compare.
- Pick whichever yields larger lifetime benefit, or whichever fits your cash situation if you're tight at closing.
Frequently Asked Questions
How much does a seller credit lower my rate?
Roughly 0.25% rate reduction per 1 discount point (1% of loan amount). On a $400k loan, $4,000 buys ~0.25% off. Some lenders are slightly more or less generous; ask for actual price quotes.
Which option saves more money?
Rate buydown wins for long-hold borrowers (5+ years). Closing-cost cash wins for short-hold borrowers or those tight on cash. Run both and compare lifetime benefit numbers.
Are seller credits capped?
Yes — by loan type. FHA: 6%. VA: 4%. USDA: 6%. Conventional: 3% (low down) to 9% (25%+ down). The seller concession calculator covers the caps in detail.
Can I split the credit between closing costs and buydown?
Yes — many lenders allow splitting. The math is just the proportional version of the two scenarios. Run each piece separately to size the optimal split for your situation.
Related Calculators
Seller Concession Calculator
Check the loan-type cap on seller concessions.
Mortgage Points Calculator
Standalone discount points calculator.
Mortgage Buydown Savings Calculator
Permanent rate buydown savings.
Temporary Buydown Calculator
2-1 or 3-2-1 temporary buydown structure.
Closing Cost Calculator
Build the closing cost figure to size the credit against.
Closing Cost vs Rate Calculator
Trade closing costs for a lower rate or vice versa.
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