Seller Concession Calculator: Price cut vs seller credit vs rate buydown: cash to close, monthly payment and seller net for each. Anything of value the seller gives the buyer beyond the property: a credit toward closing costs, a funded rate buydown, prepaid taxes or insurance. It is negotiated in the contract and paid from the seller's proceeds at closing.
A seller can drop the price, credit the buyer's closing costs, or fund a temporary rate buydown. The same dollars do very different things to the buyer's cash at closing and monthly payment. Compare all three.
Option C funds a 2-1 buydown at this price; its cost is computed from the loan.
| A · Price cut | B · Credit | C · 2-1 buydown | |
|---|---|---|---|
| Contract price | $440,000 | $450,000 | $450,000 |
| Loan amount | $418,000 | $427,500 | $427,500 |
| Buyer cash to close | $34,000 | $24,500 | $34,500 |
| Payment, P&I | $2,711 | $2,773 | $2,230 yr 1 |
| Payment after year 2 | $2,711 | $2,773 | $2,773 |
| What it costs the seller | $10,000 | $10,000 | $9,848 |
| Seller net before their own costs | $440,000 | $440,000 | $440,152 |
A price cut lowers the payment a little forever. A credit puts cash back in the buyer's pocket today, which matters most to a buyer who is short at closing. A buydown makes the first two years cheaper and costs the seller about the same as a credit. Which one wins depends on what the buyer is short of: cash or monthly room.
How much a seller may contribute
Limits change and depend on occupancy and down payment. A credit above the limit does not disappear; it reduces the price instead. Confirm with the loan originator before writing the offer.
Rates on this page are the ones you typed. This is arithmetic, not an offer to lend, not a quote and not advice; program rules, credit and the lender's pricing decide the real numbers. Ask a licensed loan originator for a Loan Estimate.
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Key facts
Buyer cash to close with a credit = closing costs − seller credit (within the program limit). Conventional limits: 3% of the price with under 10% down, 6% with 10% to 25% down, 9% with over 25% down; FHA 6%; VA 4% plus reasonable closing costs; investment property 2%.
A credit helps a buyer short on cash; a price cut helps the payment and the future sale basis. The calculator shows both sides and the seller’s net for each.
Fannie Mae and Freddie Mac cap interested-party contributions at 3% of the price when the down payment is under 10%, 6% from 10% to 25%, and 9% above 25%. Investment property is capped at 2%. Credits above the cap reduce the price for underwriting rather than being lost.
For the seller’s net, yes: a $10,000 credit and a $10,000 price cut both reduce proceeds by $10,000 before commission effects. For the buyer they differ: the credit lowers cash needed at closing today, while the price cut lowers the loan and the payment for the life of the loan, but does little for cash at closing.
Last reviewed September 8, 2026 by the EstatePass editorial team. Formulas and program limits are checked against the published rules; figures on this page are arithmetic, not market statistics.
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