Illustration: Clay Laucella/Bankrate
First-time homebuyer Ryan Katherine, 30, bought a house in Salt Lake City with his partner in 2023. After agreeing to a 2-for-1 buydown that would pay them a lower mortgage rate for the first two years, the couple’s original mortgage rate was 4.625%, but their current mortgage rate is now 6.625%.
Setting the stage for home buying
Katherine’s 2-1 buydown is an example of an increasingly popular incentive for buyers. Bankrate reports that these ultra-low new home interest rates averaged 5.27% in Q3 2025, compared to 6.26% for existing home buyers.
A seller typically finances a homebuyer’s mortgage purchase by depositing funds into an escrow account that will be applied to the monthly mortgage payments. That way, buyers pay less interest during the first few years. For example, a 3-2-1 buydown reduces your interest rate by 3% in the first year, 2% in the second year, and 1% in the third year. A 2-1 buydown like Katherine’s reduces your rate by 2% in year one and 1% in year two.
Katie Care, a loan officer with Veridian Mortgage, said buying a buyout allows you to enter the home buying market with lower monthly payments. However, be aware that interest rates may rise in the future. To reduce the cost of this increase, Keir suggests buyers monitor interest rates and consider refinancing if they drop by at least half a percentage point.
Behind the scenes of her home buying experience
Katherine found a three-bedroom, one-bathroom home for $443,000 through a local real estate agent who introduced her to a lender. However, that lender’s interest rate seemed high, so the couple started looking around at different financial institutions. This is a proven method for finding lower interest rates. They found another lender who quoted thousands of dollars lower over the life of the loan.
“He just earned my trust,” Katherine says. “Since then, I’ve been texting him and asking him, ‘I’m looking at interest rates, what do you think?'” She also searches online and compares refinance rates herself.
Catherine and her partner made just one offer, which was quickly accepted. The entire home buying process took a month. “We ended up getting a small house that we could both afford, so we’re very happy,” she says.
Their lot is 7,840 square feet with space for a patio, shed, garden, and lawn. As a homeowner, she enjoys composting, xeriscaping, and renovations. And she and her dog take daily walks on the public land right behind their house.
The couple has been talking about refinancing, but Katherine says it’s difficult to sift through the noise of real estate and personal finance. “When it comes to money, I want people to follow simple, simple rules,” she admits.
her dream of home ownership
If Katherine has the funds, she may eventually want to leave the summer heat of Utah and move further north. But she loves her home and never wants to sell it. For her, it has sentimental value.
She’s in no hurry to leave either. “I’m making a lot of friends, and it’s really snowing in Salt Lake right now,” she said when we spoke in February. “I can’t say I’m having a terrible time.”