With attention turned toward affordability and the prospect of a 50-year-mortgage having been suggested recently, the Trump administration is now proposing another 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 potentially encourage them to move and free up supply.
How Would It Work?
Sam May, co-founder of Hompwr suggest both the portable mortgage or 50-year-mortgage ideas could provide options for homebuyers: “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.”
Scarpero.com mortgage broker Carlos Scarpeo points out that, should the idea move forward, it will require significant changes to the financial system, as the idea is “not something that could be changed overnight” due to U.S. mortgages being “securitized and not held by the banks.”
An FHFA representative told CNN that the agency was studying a “wide variety of options” to lower housing costs.
