Free homeowner tool
New Construction Incentive Comparison
Tool
Compare Builder Incentives
Builders often offer one incentive or another. See how each could change your monthly principal and interest, cash at closing and price.
| Incentive | Purchase price | Monthly P&I | Est. cash at closing |
|---|---|---|---|
| Closing-cost contribution $12,000 toward your closing costs | $500,000 | $2,919 | $53,000 |
| Price reduction $15,000 off the price | $485,000 | $2,831 | $63,050 |
| Rate buydown Rate of 5.75% (confirm if temporary or permanent) | $500,000 | $2,626 | $65,000 |
| Upgrade allowance $15,000 in upgrades — no change to payment or cash | $500,000 | $2,919 | $65,000 |
A price reduction keeps helping for the life of the loan and can lower property taxes. A rate buydown usually lowers the payment more at first, but temporary buydowns step back up. Closing-cost help reduces the cash you need now. Upgrades add value you'll live with but don't change the math. Your closing cost baseline here is an assumed 3% ($15,000).
Estimates only. Actual rates, buydown terms, closing costs and loan eligibility must come from a lender; no promise of outcome is made. Builder incentives often depend on using the builder's preferred lender — ask for the terms in writing.
How builder incentives work
A price reduction lowers the loan amount and often your property taxes. A rate buydown lowers your interest rate, either permanently or for the first year or two. Closing-cost contributions reduce the cash you bring to closing. Upgrade allowances improve the home but don't change your payment.
Many incentives require using the builder's preferred lender or title company. Ask for every incentive in writing and compare the loan estimate with at least one outside lender.
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