Could You Take Your 3% Mortgage Rate With You? What Homeowners Should Know About the MOVE Act

For many homeowners, one of the biggest reasons they don't want to move has nothing to do with their house.

It's their mortgage rate.

Homeowners who bought or refinanced when rates were historically low may currently have mortgages in the 3%–4% range. Selling their home could mean giving up that low rate and financing their next purchase at today's higher rates.

A newly proposed bill in Congress, called the Making Ownership Viable for Everyone (MOVE) Act, is looking at a potential solution: portable mortgages.

What Is a Portable Mortgage?

A portable mortgage could potentially allow a homeowner to transfer an existing qualifying mortgage from their current property to their next property.

In simple terms:

You move. Your mortgage moves with you.

Instead of selling your home, paying off your existing mortgage, and obtaining an entirely new mortgage at current rates, you could potentially carry over your existing:

• Interest rate
• Remaining loan balance
• Loan terms

to your next property, assuming the mortgage and transaction meet the program's requirements.

Here's a Simple Example

Imagine you currently owe $250,000 at a 3.25% interest rate.

You want to sell your current home and purchase a larger home.

Under today's typical process, your existing mortgage would be paid off when you sell. You would then need to obtain a new mortgage for your next home at the rates available at that time.

Under the concept proposed by the MOVE Act, a qualifying homeowner could potentially transfer that $250,000 mortgage and 3.25% rate to the replacement property.

That's why this proposal is getting attention.

Why Could This Matter for the Housing Market?

The housing market has been dealing with what's commonly called the mortgage rate lock-in effect.

Many homeowners would consider moving but don't want to give up the low mortgage rate they already have.

Maybe they need another bedroom.

Maybe they're ready to downsize.

Maybe they want a different school district, more land, a first-floor primary suite, or a shorter commute.

But once they calculate the payment on their next home, they decide to stay.

That doesn't just affect the homeowner. It can also reduce the number of homes available for buyers.

If portable mortgages eventually become widely available, they could potentially give some homeowners more flexibility to move while also bringing additional homes onto the market.

Could This Help Metro Detroit Homeowners?

Potentially.

There are homeowners throughout Macomb County, Oakland County and the rest of Metro Detroit who purchased or refinanced during the low-rate years.

Some may have significant equity in their homes and an extremely attractive mortgage rate.

Being able to preserve that rate could completely change the conversation around selling and buying another home.

However, there is an important catch.

The MOVE Act Is NOT Law

The MOVE Act, introduced as H.R. 10028, is proposed federal legislation.

That means homeowners cannot currently call their lender and simply request to transfer their conventional mortgage to another property because of this bill.

The proposal would still need to make its way through the legislative process, and its provisions could change significantly along the way.

There are also important questions that would need to be answered before homeowners could know exactly how portability would work in practice.

For example, what happens if your new home requires a larger mortgage? Would you have to requalify? Which existing mortgages would qualify? What fees would apply?

Those details matter.

Portable vs. Assumable Mortgages

These terms can easily get confused.

Portable mortgage:
Same borrower → Different property

Assumable mortgage:
Different borrower → Same property

The MOVE Act proposal is focused on making certain mortgages portable so homeowners could potentially bring their existing financing with them when they move.

What Should Homeowners Do Right Now?

Don't make a real estate decision today based on the assumption that this legislation will pass.

However, if the main reason you're staying in your current home is because you're afraid to lose your low mortgage rate, it may still be worth looking at the numbers.

Your home may have appreciated substantially since you purchased it. The equity you have available for your next purchase could offset more of the payment difference than you expect.

Every homeowner's situation is different.

Before deciding that you're "stuck" because of your mortgage rate, find out:

What is your home worth today?
How much equity would you walk away with?
What could that equity buy you?
What would your actual next mortgage payment look like?

Those numbers can give you a much clearer picture. And if you need any answer

 

Angelo Naci | Realtor®

📱 586.556.6495 | 248.213.8020
📧 angelonacirealtor@gmail.com
🌐 homeswithangelo.com

Disclaimer: The MOVE Act (H.R. 10028) is proposed federal legislation and has not been enacted into law. This article is for general educational purposes only and should not be considered legal, financial, tax, or mortgage advice.