The idea sounds simple: it lets you move while keeping your rate. However, the reality is more complex, and not everyone benefits equally.
Can you really keep your mortgage when you move? That’s the big idea behind something called a portable mortgage, and it’s starting to get people’s attention.
Imagine selling your current home and buying a new one, and getting to keep your low-interest mortgage. Sounds almost too good to be true, right? Well, it’s not available yet, but it’s a concept that’s being discussed more and more in the housing world.
Here’s what you need to know.
What is a portable mortgage? It’s an idea where, instead of starting over with a brand-new loan when you buy a new house, you can keep your current mortgage (same loan, same interest rate, same balance) and move it to your new home. This could be super helpful if you locked in a low rate a few years ago and don’t want to trade it for today’s higher ones.
Let’s say you got a mortgage a few years ago with a 3% interest rate. Now, mortgage rates are much higher, more like 6% or 7%. If you sell your home today, you’d normally have to get a brand-new loan with that higher rate. But with a portable mortgage, you can keep your 3% loan when you buy your next house. That could save you thousands of dollars over time.
Why is this idea coming up now? Right now, many people feel stuck. They want to move, but they’re afraid of giving up their very low mortgage rate. That’s why people are calling this situation being “rate-locked.” It’s one of the reasons the housing market has so few homes for sale. Portable mortgages could help change that by giving people a way to move without losing their low rate.
“While portable mortgages could help some people, it’s not a one-size-fits-all solution.”
Who would this help? This would be great for homeowners who already have a super low mortgage rate and want to move. They could carry their old loan over and avoid starting a new loan at a much higher rate.
What’s the catch? If you’re renting, buying your first home, or already have a high-interest mortgage, this wouldn’t change anything for you. Also, if the home you’re buying is more expensive, you’d still need to cover the difference between your current loan and the new home’s price.
An additional fact is that this is still just an idea in the U.S. It’s already used in places like Canada and the UK, but it hasn’t been rolled out here yet. Even if it does become available, not all lenders may offer it. And even if they do, you’d still have to qualify for the new home and cover any price difference with cash or a second loan.
Plus, this wouldn’t fix everything; first-time buyers and renters still face big challenges with rising home prices and saving for a down payment. So, while portable mortgages could help some people, it’s not a one-size-fits-all solution.
If you already have a low-rate mortgage and are thinking about moving in the next few years, it’s worth keeping an eye on this. Portable mortgages could help you make that move without giving up the great deal you already have. It’s not available yet, but if the rules change, being ready could give you a big head start.
Want to learn how this could affect your next move or if you qualify for special lending options? Call me at 305-239-8939 or 305-898-6224, or email me anytime at Jorge@DadOf8RealEstate.com. I’ll be happy to walk you through your options in today’s changing market.
