A portable mortgage lets you move your existing loan and its interest rate to a new property rather than getting a completely new mortgage. For example, if you’ve paid off half of a $400,000 home at a 3% interest rate, you could sell that house and transfer the remaining $200,000 balance—keeping your 3% rate—to your next home. If your new place costs more, say $450,000, you’d need to handle the extra $50,000 either by paying cash or taking out another smaller loan, likely at today’s higher rates.
This practice could make it easier for homeowners to relocate without losing low-interest rates, potentially encouraging more people to sell and giving buyers who’ve been shut out of the market more opportunities—though the impact on affordability remains unclear. According to Redfin’s analysis of FHFA data, over half of homeowners with mortgages enjoy rates below 4%, while the average has hovered between 6% and 7% in recent years. Many who locked in those low rates have been reluctant to move. Portable mortgages might motivate them to do so, increasing housing supply, but there are concerns about how such a system would function and whether it could push rates even higher for other buyers.
The proposal is intended to ease the shortage of homes for sale, but I believe the core issue isn’t supply—it’s affordability. Even if more homes hit the market while rates remain around 6%, prices would have to drop for buyers to afford them. While current homeowners could benefit by keeping their lower rates when purchasing new homes, they’d probably need to reduce their asking price for buyers facing present-day rates unless they sell to someone else who also qualifies for a portable rate. This wouldn’t help new buyers stuck with higher rates. Ultimately, the plan seems to favor existing homeowners over first-time buyers and raises questions about who should be designing solutions for the housing market.
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