In a Real Estate & Mortgage Market where interest rates dipped super low during the pandemic, many homeowners are holding off on their next move more than ever, because they either bought a home during the pandemic-era interest rate market or they refinanced the mortgage they already had on their home into a very low rate. In either case, there are millions of Americans who have a desire to move, but they’re afraid to because they have an Interest Rate in the high-2’s or low 3’s, and if they move, they’ll have to get a mortgage at today’s rates, which are high-5’s or low 6’s as of the date this blog is published.  As homeowners who would typically move are holding off, it’s taken a toll on the national Real Estate Market.  In Washington D.C.’s efforts to strengthen this market, one idea that has been floated for consideration is the idea of portable mortgages.

While portable mortgages are common in countries like Canada and parts of Europe, they do not currently exist in the United States. Still, the concept has sparked conversation here, and many homeowners want to understand what portability would look like and what alternatives exist today.

As a mortgage professional, I’m here to break down what portable mortgages are, why they matter, and how U.S. borrowers can still benefit from similar strategies.

What Is a Portable Mortgage?

A portable mortgage allows you to take your existing mortgage, along with its interest rate and terms, and transfer it to a new home when you move.

This is incredibly useful in rising-rate environments. Instead of purchasing with a mortgage that has a higher rate, homeowners with low interest rates can keep their existing low rate.

Key Features (In Countries Where They Exist)

• The interest rate stays the same
• Many loan terms stay intact
• The mortgage can be transferred to a new property
• Some lenders allow “blend-and-extend” options if you need to borrow more

Why Portable Mortgages Aren’t Available in the U.S.

In the United States, mortgages are tied to the property, not the borrower. This means that when you sell your home, the mortgage is automatically paid off, it can’t follow you to the next house.

But despite this, the idea has been floating around in the U.S. mortgage industry for years.

With more homeowners “locked in” at historically low rates, the portability concept has gained even more traction in industry discussions. Some experts argue that mortgage portability could:

• Improve affordability
• Help inventory move faster
• Make it easier for homeowners to relocate

The FHFA in Washington is researching to see if this could become a possibility.

Portable Mortgage Pros (Where They’re Available)

Even though portability isn’t an option here, understanding the advantages helps explain why the concept is being discussed:

• Keep Your Low Rate – No need to give up your great interest rate because rates have risen.

• Maintain Lower Payments – Your monthly payment is kept lower in the event that you sell your current home and buy your next home.

Drawbacks of Portable Mortgages

Even in countries where portability exists, it isn’t perfect:

• You must typically buy and sell within a specific timeframe

• The new property must meet lender requirements

• Not all mortgage products are portable

• Borrowers may still need to undergo underwriting

• Sometimes a blended rate is required if you need extra funds

• Portability offers flexibility, but not complete freedom.

• This concept would create a total upheaval of our country’s bond market financial system, as Mortgage-Backed Securities are based on pools of mortgages that are all collateralized by a specific property.

U.S. Alternatives That Provide Similar Benefits

Until portable mortgages become a reality in the United States (if they ever do), borrowers can use these strategies to achieve similar outcomes:

1. Assumable Mortgages (FHA & VA Loans)

These allow a buyer to assume the seller’s loan (including the low rate).  This can be very appealing to many homebuyers.

2. Mortgage Recasting

Lets you lower your monthly payment by paying a significant amount against the balance, without the time and cost of refinancing.

Will the U.S. Ever Adopt Portable Mortgages?

It’s possible, but not guaranteed. The idea continues to gain attention as homeowners remain reluctant to give up low rates secured during the pandemic. Some economists believe portability could help ease the housing supply crunch. However, the structure of the U.S. mortgage market makes it a complex shift that would require major policy and investor changes.

For now, the concept remains a topic of discussion as our nation’s leaders search for ways to strengthen the Real Estate Market, rather than a real product.

Thinking About Moving? Let’s Build a Smart Strategy.

Even without portable mortgages, you still have powerful tools to protect your finances during a move. As your mortgage expert, I can help you evaluate the right approach based on your goals, timeline, and market conditions. Call me today at (214) 542-4095 or email Rob@TeamRobHomeLoans.com to start exploring mortgage options best suited to your needs and goals.