What are discount points? One point equals 1% of your loan amount, paid upfront to permanently buy down your interest rate. The pricing below reflects an actual lender rate sheet — costs vary by lender and change daily.
Your Rate
6.50%
Upfront Cost *est.
$0
Monthly Payment (Par)
$2,528
Monthly Payment (Bought Down)
$2,528
Monthly Savings
$0
Break-Even
N/A
Select a rate option above to see the break-even analysis.
*Estimate only based on a sample lender rate sheet. Text (509) 903-9486 for live pricing on your scenario.
Today's Average Rates · 30yr Fixed
Conv—%
FHA—%
VA—%
Source: MortgageNewsDaily · National averages for informational purposes only — not a commitment to lend.
Who pays for points?
Points can be paid by the buyer, the seller (as a concession), or your agent. Buying points makes the most sense when you plan to stay in the home past the break-even date.
Temporary Buydown Comparison
Temporary buydowns reduce your rate for the first 1-3 years, then adjust to the full note rate. The cost is typically paid by the seller as a concession or your agent's portion of commission—not out of your pocket.
1/1 Buydown
Year 1
5.75%
Payment: $2,364
Year 2+
6.75%
Payment: $2,571
Total Cost: $2,484
Lightest option—ideal when seller concessions are limited or you want a modest payment reduction.
2/1 Buydown
Year 1
4.75%
Payment: $2,082
Year 2
5.75%
Payment: $2,364
Year 3+
6.75%
Payment: $2,571
Total Cost: $5,916
Most popular option—significant year 1 savings with a gentle step-up. Great buyer incentive.
3/2/1 Buydown
Year 1
3.75%
Payment: $1,863
Year 2
4.75%
Payment: $2,082
Year 3
5.75%
Payment: $2,364
Year 4+
6.75%
Payment: $2,571
Total Cost: $10,908
Maximum relief—excellent when the seller is motivated or you need the lowest payment to qualify.
*Estimates only. Actual buydown cost = total interest savings during reduced-rate period. Text (509) 903-9486 for live pricing on your scenario.
Key Insights:
• Temporary buydowns are typically seller-paid or agent-paid—not out of your pocket.
• If rates drop during the buydown period, you can refinance into a lower permanent rate and keep the remaining buydown funds.
• Ask your agent to negotiate a seller-paid buydown instead of a price reduction—it often saves you more in the long run.
FHA vs. Conventional Loan Comparison
Both FHA and conventional loans have distinct advantages depending on your credit score, down payment, and timeline. Let's break down the key differences.
Conventional
Minimum Down3% (5% for better rates)
Credit Score620+ (best at 740+)
PMIRequired below 20% down, drops off at 78% LTV
Loan Limit (WA)Up to $832,750 (higher in some counties)
Interest RateGenerally lower than FHA for 720+ scores
Best ForGood credit, 5%+ down, want PMI to drop off
FHA
Minimum Down3.5% (or 0% with DPA—closing costs apply)
Credit Score580+ (some lenders go to 500 with 10% down)
MIP0.55% annually (for life if <10% down)
Upfront MIP1.75% (financed into loan)
Loan Limit (WA)Up to $541,287
Best ForLower credit, first-time buyers, or 0% down
The Bottom Line: For credit scores above 720 with 5%+ down, conventional usually wins on rate. Below 700 or with less than 5% down, FHA often provides better overall terms. With FHA's 0% DPA programs (closing costs and fees still apply), many borrowers get into homeownership faster. Your broker runs both scenarios to find what saves you the most.
ARM vs. Fixed-Rate Comparison
What is an ARM? An adjustable-rate mortgage (ARM) offers a lower initial rate that adjusts after a fixed period. If you plan to sell or refinance before the adjustment, ARMs can save you significant money.
ARM Options by Loan Type
FHA ARM
5/1 ARM Rate fixed for 5 years, then adjusts annually
Annual Cap: 1% (borrower-friendly)
Lifetime Cap: 5%
Only one ARM option, but strong rate caps protect you.
Conventional ARM
3/1 ARM Rate fixed for 3 years, then adjusts annually
5/1 ARM Rate fixed for 5 years (most popular)
7/1 ARM Rate fixed for 7 years
10/1 ARM Rate fixed for 10 years
Rate caps vary by product (typically 2/2/5 or 5/2/5).
Fixed-Rate 30yr
Rate locked for life. Payment never changes.
Typically 0.5–1% higher than ARM initial rate
Best for: Staying long-term, rate certainty, don't want to refinance risk
Peace of mind over lowest initial payment.
When Does an ARM Make Sense?
Planning to sell within 5–7 years — Lock in low initial rate, sell before adjustment
Expecting to refinance when rates drop — Take advantage of lower ARM rate now, refinance when rates improve
Need the lowest possible payment right now — Reduce your monthly obligation during the fixed period
Buying a starter home you'll outgrow — ARM gets you in affordably with the plan to upgrade later
Important: ARMs carry refinance risk. If rates don't drop or you can't refinance before adjustment, your payment will increase. Make sure you're comfortable with the worst-case scenario.
Ready to Explore Your Options?
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