New Construction · Utah County
A 2-1 buydown can make your first year genuinely affordable, and that is a great way to get into a new home. The only thing that trips people up is treating year-one as forever. See all three years now, budget for the step-up, and the rate adjustment becomes a non-event instead of a surprise.
Decoding the flyer
Here is a real builder ad, translated. When a builder advertises something like a 1.99% rate, that is almost never the rate of your loan. It is the first year of a temporary buydown sitting on top of a higher real rate. Here is how one actual offer breaks down.
The big number is year one only
"1.99%" is what you pay in the first year. It is real, and it makes that first year genuinely affordable. It just is not permanent.
The rate climbs on a schedule
In a 2-1 buydown, the rate steps up each year: roughly 1.99% in year one, about a point higher in year two, then it lands at the real rate. In that EDGEhomes example the real rate underneath was 3.99%, so the payment settles there from year three on.
It can be an ARM, so even the "real" rate may move
That same offer was a 7/6 ARM, meaning the 3.99% itself can adjust after seven years. Not a dealbreaker, just something to know going in. A fixed-rate buydown and an ARM buydown are not the same animal.
You are not paying for the buydown, the builder is
The fine print usually says the buydown is paid out of the seller credit the builder was already offering. That is why it does not raise your cash to close. It also means those same dollars could go toward a permanent buydown or your closing costs instead. Which is the smartest use depends on how long you will stay, and that is the conversation worth having.
So when you see a number that looks too good, it is not a trick, it is just year one. Plug your own numbers in below and you will see all three years at once, plus what you would actually bring to closing.
Change anything. It all updates as you type.
Based on the offer you entered
The number to budget for now
$0 / month
Your cash to close, roughly
$0
Before you assume you can't afford the down payment
If this is your first home, the state of Utah may lend you up to $20,000 toward your down payment, closing costs, or a permanent rate buydown. It was created for newly built homes, and most buyers have no idea it exists.
$20K
Up to this amount, for a new-construction home priced at or below $450,000.
0%
Interest, with no monthly payment. It sits quietly behind your main loan.
First
Time buyers, meaning you haven't owned a home in the last three years.
The honest part, because you should hear it from me and not a sales office
This is not free money. It's a deferred loan: you pay it back when you sell or refinance, either the amount you borrowed or up to half your equity, whichever applies. That still makes it a powerful way to get in the door with little cash up front, but go in knowing it's a loan, not a gift. A couple of catches worth knowing: funds are first come until they run out, and you generally need to have lived in Utah for about a year before closing, so a buyer who JUST landed from California may need to wait a bit to qualify.
Programs and availability change, so check the current details straight from the source: utahhousingcorp.org/homebuyer/programs. Want help figuring out if you qualify and how to stack it with a builder's incentive? That's a great reason to text me.
With some builders, not all, your buyer's agent needs to be with you the very first time you visit, or you can waive your right to representation on that community. It costs you nothing to have an agent; the builder pays that side. So before you walk into a model home, let's go together the first time. It protects you, and it means someone in your corner is reading the fine print on these incentives, not just the sales office.
These are estimates for planning, principal and interest only. Taxes, insurance, HOA, and mortgage insurance are not included and will raise the actual payment. Buydown structures, qualifying rates, and terms vary by builder and lender, and an offer like "1.99%" is often a temporary buydown on top of a higher note rate. Nothing here is a loan offer, a rate quote, or a commitment to lend, and it is not financial advice. Kelsie is a real estate agent, not a licensed mortgage lender. Your lender's official Loan Estimate is the only document that reflects your real numbers. This tool exists purely to help you understand your options before you talk to them.