I've had the same conversation with homeowners again and again: "I'd love to move, but my rate is under 3%. Why would I give that up?"
That concern is real. Mortgage rates fell to historic lows in 2020 and 2021, while today's rates are much higher. For many homeowners, moving means replacing an unusually low mortgage with much more expensive financing. Freddie Mac
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The Lock-In Problem
About 78% of outstanding U.S. mortgages have rates below 6%, and nearly half are at 4% or lower. That helps explain why so many homeowners are staying put even when their current home no longer fits their needs. Realtor.com
This is known as the mortgage rate lock-in effect. When homeowners are reluctant to give up a low rate, fewer homes come onto the market, which can reduce housing turnover and inventory. Freddie Mac
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What Could Change
The MOVE Act, introduced by Rep. Tom Kean Jr., proposes making portable conventional mortgages more widely available through Fannie Mae and Freddie Mac.
A qualifying borrower could potentially transfer their existing mortgage rate, terms and remaining balance to a replacement property. MOVE Act
But this is important: the bill has not become law, and portable mortgages are not available through the MOVE Act today.
It also does not guarantee that every existing low-rate mortgage would automatically become portable. Lender approval and future eligibility rules would still matter. MOVE Act
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What Could the Math Look Like?
Imagine you owe $620,000 at 2.875% and want to buy a $1.35 million home.
If your mortgage qualified for portability, that $620,000 balance could potentially keep its existing rate and terms. You would still need to cover the remaining purchase price through equity, cash or additional financing.
The bill does not yet spell out exactly how that additional financing would work. MOVE Act
.
Why This Matters in the South Bay
For homeowners in Manhattan Beach, Redondo Beach, Torrance, El Segundo and throughout the South Bay, portability could eventually remove one major reason people hesitate to move.
If more homeowners felt comfortable selling without giving up all the value of their low-rate financing, it could help increase resale inventory and create more movement throughout the market.
That said, mortgage portability would not solve every affordability or inventory issue. It would simply remove one obstacle that keeps some homeowners in place. Fannie Mae
.
What Should You Do Now?
If you're thinking about moving, don't wait for this bill.
Talk with a qualified mortgage professional about the options available today and look at your entire financial picture, including your equity, current payment, next purchase price and long-term goals.
A great mortgage rate is valuable, but it doesn't automatically mean you have to stay in a home that no longer works for you.
If you're considering buying, selling, downsizing or moving up in the South Bay, let's look at the numbers and see what options actually make sense.
The MOVE Act remains proposed legislation. This article is for general informational purposes only and is not financial, mortgage, tax or legal advice.
