Could a Portable Mortgage Let You Keep Your Low Rate When You Move?
Ever wish you could take your 3% mortgage rate with you to your dream home? A new bill could actually make that possible. The "Making Ownership Viable for Everyone (MOVE) Act" would let eligible homeowners transfer their current mortgage to a new property, potentially unlocking millions of Americans stuck in place to protect their rates.
Sounds too good to be true? That's because portable mortgages come with serious strings attached. Lenders still have full say over whether your transfer goes through, and plenty of deal-breakers exist — from credit checks to property appraisals. Here's what you need to know.
Keep Learning: How Mortgage Recasting Could Lower Your Payment Without Giving Up Your Low Rate
Read Next: 5 Low-Effort Ways To Make Passive Income (You Can Start This Week)
What Would the MOVE Act Do?
Introduced by Congressman Tom Kean, Jr. (NJ-07) on Aug. 3, HR 10028 would require Fannie Mae and Freddie Mac to start purchasing portable conventional mortgages. Under the bill, lenders would have 180 days to set up the system, and borrowers would need to transfer their mortgages within 90 days of selling their home, according to Taylor Ann Real Estate.
The idea: remove the rate-lock stranglehold keeping people from moving and free up housing supply for families who've outgrown or are looking to downsize their current homes.
Why Lenders May Reject Portable Mortgages
While this may sound like an ideal solution to the housing crisis, a lender could reject the transfer for several reasons, including if the borrower’s credit, income or debt profile has changed.
“Moreover, if the new property doesn’t pass an appraisal, or meet the loan-to-value or other requirements, then I would also expect the mortgage to be unusable there," said John Donikian, vice president of Best Interest Financial.
“Portability doesn’t eliminate underwriting; it simply allows the lender to be comfortable with the borrower and new property," he added.
Portable Mortgages Could Address Lock-In Effect
The problem this bill tries to solve is real.
When homeowners stay put to protect low rates — a phenomenon called the lock-in effect — it stalls the entire housing market. Between the second quarters of 2022 and 2024, a lock-in effect stunted 1.72 million home sales, according to a 2024 analysis by the Federal Housing Finance Agency. Portable mortgages could theoretically unfreeze that market.
How Much Eligible Homeowners Could Save
Here's the math: Say you owe $300,000 at a 3% fixed rate with 25 years left. Your monthly principal and interest payment is roughly $1,423.
If you refinanced that same loan at at an existing mortgage rate of 6.5% for 25 years, you'd pay about $2,026 a month — $603 more. That's $7,236 annually (before transfer costs, taxes, insurance and fees). Portable mortgages would let you sidestep that hit entirely.
How Mortgage Transfer Affects First-Time Home Buyers
Since first-time buyers don’t have an existing mortgage to transfer, they would need to pay the current interest rate of 7.03% for a 30-year mortgage or 6.42% according to Freddie Mac (as of Sep. 28).
That said, a larger supply of homes hitting the market could theoretically bring prices down — though bidding wars often negate that benefit. Inventory alone doesn't guarantee affordability.
The Bottom Line
Portable mortgages solve a real problem for existing homeowners with golden-ticket rates. But they're not a cure-all for the housing crisis. The bill still needs to pass Congress, lenders still hold the cards on who qualifies and first-time buyers remain on the outside looking in. If you're rate-locked and considering a move, this could be worth watching, but don't count on it yet.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion: