Portable Mortgages: The Good, the Bad, and the Ugly
President Trump has recently raised the idea of allowing portable mortgages—a system where homeowners can take their existing interest rate with them when they move to a new home.
This idea is new for the United States, but it’s not new globally. Countries like Canada and the United Kingdom have used versions of portable mortgages for years.
Here’s a clear breakdown of what this could mean for buyers, sellers, and the overall housing market.
The Good
1. Homeowners Could Keep Their Low Rate
One of the biggest challenges in today’s market is the “rate lock-in effect.”
Millions of homeowners have mortgages between 2.5%–4%. Portable mortgages would let them keep that rate when they move instead of taking today’s higher rates.
This could free up inventory by encouraging owners to list their homes without losing their great financing.
2. Smoother Upsizing or Downsizing
Life changes—family size, income, job locations.
Portability allows people to move into a more suitable home without dramatically increasing their monthly payment.
This would especially help move-up buyers and empty nesters.
3. Could Increase Market Activity
More people willing to sell means more transactions for buyers, sellers, builders, and agents.
In markets like Atlanta, where inventory has been historically tight, this could create healthier market movement.
The Bad
1. It Doesn’t Fix Affordability
Portable mortgages only help current homeowners with low rates.
First-time buyers, renters, and anyone without an existing low-rate mortgage receive no direct benefit.
Portable mortgages may help mobility, but they do not solve high prices or low supply.
2. It Adds Complexity to U.S. Mortgage Lending
Unlike Canada and the UK—where lenders hold loans on their books—the U.S. relies heavily on long-term fixed mortgages and securitization through Fannie Mae and Freddie Mac.
Porting a loan requires lenders and investors to accept:
A new property
A new risk profile
A new valuation
A new term structure
This adds underwriting complexity and potential extra fees.
3. Could Require Additional Financing
If someone ports a low rate from a $300,000 house to a $500,000 house, they still need financing for the difference.
That second portion would likely be at current market rates, not the low rate they are porting.
The Ugly
1. Could Push Home Prices Even Higher
If current homeowners can bring a 3% rate with them, they can afford to pay more for their next home than new buyers who are stuck at today’s rates.
That gives porting buyers an advantage—
and it could push prices upward, making affordability worse overall.
2. Risk of Uneven Market Benefits
Those with low rates get rewarded.
Those without them fall further behind.
This could widen the gap between existing homeowners and first-time buyers.
3. Implementation Could Be Difficult
Portable mortgages work well in countries where:
Fixed terms are shorter
Lenders keep loans in-house
Mortgage products are more flexible
In the U.S., the structure is not designed for this.
It would require major changes by lenders, regulators, and mortgage investors.
How Other Countries Handle Portable Mortgages
Canada
Portability is common.
Most mortgages have fixed terms of 2–5 years, not 30 years. Because lenders keep more loans in their own portfolios, transferring them is more manageable. Borrowers often “blend and extend” when they move to a more expensive home.
United Kingdom
Many mortgages are portable.
However, UK mortgages are shorter-term, often variable or with short fixed periods. This makes portability simpler from a regulatory and financial perspective.
Key Takeaway:
Portable mortgages work overseas because their systems are built for it.
The U.S. system is not.
That doesn’t mean it’s impossible—just that it comes with challenges.
Final Thoughts
Portable mortgages could help some homeowners move more easily and bring inventory back into the market.
But they won’t solve affordability, and they introduce real risks and complexities.
If portable mortgages become real policy, expect:
Stricter qualification guidelines
Additional lender fees
Split-rate financing when buying a more expensive home
Uneven benefits depending on who already has a low rate
I’ll keep watching this closely so you can stay ahead of the market.
Tune in every Tuesday for a new blog, real estate breakdown, or market update.
Contact Information
Worrell Thomas
Real Estate Advisor
Century 21 Connect Realty
678-236-4262
worrellt@c21connectrealty.com
www.worrellthomasrealestate.com