As the idea of a 50-year mortgage faced criticism from some in the financial community, the Trump Administration is now floating the idea of a portable mortgage.
Even the Treasury Department seemed to step back from the idea of a 50-year mortgage.
“The Treasury Department is looking at all sorts of factors,” Joe Lavorgna, a counselor to Treasury Secretary Scott Bessent, said during an appearance on NewsNation’s “The Hill.” “That was one proposal. The feedback has been such that probably—and it did not come from Treasury—but probably not an optimal approach.”
Now the Trump administration is proposing a different idea aimed at making housing more affordable: Let homeowners take their mortgage rate with them when they move.
Federal Housing Finance Agency (FHA) Director Bill Pulte said on X that the administration is “actively evaluating” so-called “portable mortgages.”
One reason homeowners are reluctant to move, which keeps homes off the market, is that a new mortgage would be more expensive.
A Redfin analysis of FHFA data shows that just over half of homeowners with a mortgage have a rate below 4%. However, average mortgage rates have been between 6% and 7% for the last few years.
Enabling people to keep their lower mortgage rates could encourage them to move and free up supply. But there are questions about how that would work and whether it might wind up actually raising mortgage rates overall, Susan Wachter, a professor of real estate at the Wharton School of the University of Pennsylvania, said in a CNN report.
However, Scarpero.com mortgage broker Carlos Scarpeo doesn’t think the idea will catch on: “It would require a complete overhaul of our financial system. It’s not something that could be changed overnight. This is because mortgages in the US are securitized and not held by the banks. Even worse, it can’t be backdated which means it wouldn’t even solve the lock in effect problem. Like a lot of proposals these days, I don’t see this one going anywhere.”
Sam May, co-founder of Hompwr sees the ideas as providing better options for home buyers: “Having both a portable assumable mortgage and a 50-year loan available will help to bridge the gap between the haves (those with a mortgage at 3%s) and have-nots (those with mortgages of 6% or higher). So first-time buyers who don’t have that 3% mortgage have a tool they can use to compete on a payment level and increase their buying power in an unlocked, more active housing market. Otherwise, affordability remains an issue, and they won’t be able to compete with somebody who’s trying to move their 3% mortgage over.”
