If you’ve been watching mortgage rates over the past year, you know they’ve been higher than many buyers would like. While rates have shown some signs of stabilizing, affordability is still top of mind for anyone thinking about buying a home in Salt Lake City.
That’s where a 2-1 buydown comes in — a tool that can help you secure your dream home now, while easing into your full mortgage payment over time.
What Is a 2-1 Buydown?
A 2-1 buydown is a mortgage financing option that temporarily lowers your interest rate for the first two years of your loan:
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Year 1: Your rate is 2% lower than the fixed rate on your mortgage.
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Year 2: Your rate is 1% lower than your fixed rate.
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Year 3 and Beyond: Your rate returns to the original fixed rate for the remainder of the loan term.
The difference in payments during the first two years is covered upfront — often by the seller or builder as part of negotiations.
The Benefits Right Now
1. Lower Payments While You Settle In
In year one, your monthly payment could be hundreds of dollars less than it would be without the buydown. That means more breathing room for moving expenses, furniture, or home improvements.
2. Take Advantage of Today’s Buyer-Friendly Market
In Salt Lake City right now:
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Inventory is up compared to last year.
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Competition is down from the peak pandemic market.
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Many sellers are more willing to negotiate, making them open to covering your buydown cost.
3. Opportunity to Refinance Later
If rates drop in the next couple of years — as many experts expect — you can refinance into a lower permanent rate before your payments reach the full amount. By acting now, you secure your home before competition and prices spike again.
4. Smooth Financial Transition
Whether you’re moving from a lower-cost rental, another home, or even out of state, the 2-1 buydown eases the jump into homeownership with a gradual payment increase instead of a shock to your budget.
Why Waiting Could Cost You
If you wait for rates to fall, you could end up competing with a wave of new buyers — driving prices higher and giving sellers the upper hand again. Buying now with a 2-1 buydown lets you lock in a home while market conditions are still in your favor.
Bottom Line
A 2-1 buydown isn’t just a creative financing tool — in today’s Salt Lake City market, it’s a strategic way to make your move now, with less financial pressure and more long-term upside.
If you’re curious how this could work for you, let’s talk. I’ll walk you through the numbers and help you negotiate the best terms for your next home.
Call or message me today to start your home search with a smart plan in place!
