Mortgage Buydown or Not?!!

[Justin Bo]

Please forgive me, I am not an expert with this type of analysis!

My question is.. Should I buydown the mortgage, or not?

This is a 30-year fixed, 25% down, investment property.

The non-buydown interest rate is 5.625% with a monthly principal & interest payment of $718.14.

The buydown costs $4,834.14 and the interest rate will instead be 4.5% with a monthly principal and interest payment of $632.10. If I buy down the rate, I will be saving $86.04 per month on principal and interest payments.

I am also curious about possibly adding in additional monthly payments directly toward the principal into the equation, to the tune of $100-$400 per month.

I plan on holding this property for over 5 years.

Any feedback or insight is much appreciated!

Thank you!