Congress Keeps Floating "Portable" Mortgages. Here's Why It's Not That Simple

With mortgage rates on a rough climb this year, Congress has brought up an idea that sounds appealing on paper: letting homeowners take their current mortgage, and its rate, with them when they move. According to Tristan Navera's reporting for Realtor.com, the latest version of this idea is a bill called the MOVE Act, introduced by Rep. Thomas Kean of New Jersey back in June. It's worth understanding why experts think it would be harder to pull off than it sounds, and why it might not even help the way it's supposed to.

What a portable mortgage would actually do

The idea is simple to explain. If you locked in a low rate a few years ago, a portable mortgage would let you carry that same loan and rate to your next home instead of taking out a brand new mortgage at today's rates. In theory, that removes the reason so many homeowners are staying put right now, since moving today usually means trading a low rate for whatever rate is current. If you're buying a more expensive home, you'd still need to cover the price difference, either paying it down directly or taking out a second loan for that portion.

Why it's not just a paperwork problem

Realtor.com senior economist Jake Krimmel says the real issue is how the U.S. mortgage system is built. "The U.S. mortgage market is built on securitization, where investors buy pools of loans priced against the specific homes behind them," Krimmel explains. A portable mortgage breaks that link. It also removes the prepayment event that normally happens when a homeowner sells, which is a big part of how these loans get valued in the first place. Krimmel adds that investors would likely demand compensation for that added uncertainty, "and those latter two new risks could translate into higher mortgage rates." In other words, a policy aimed at affordability could end up pushing rates up instead.

Other countries do this, but their systems are different

Both the UK and Canada allow portable mortgages. The difference, according to Krimmel, is that neither country relies on the 30-year fixed-rate loan the way the US does. Rates in those markets reset every few years, loan terms are shorter, and prepayment penalties exist. Because of that, loans there typically aren't packaged and sold to investors the way they are here. They stay on bank balance sheets instead, which makes the whole portability question a lot simpler to manage.

Why this is coming up now

Since the MOVE Act was introduced in June, mortgage rates haven't gotten any friendlier. Last week the average rate on a 30-year fixed loan rose to 7.40%, according to Freddie Mac, the highest level since 2023. This year's climb has been driven by a mix of inflation worries, a global bond sell-off, and growing concern over government deficits, and it's exactly that kind of pressure that keeps bringing ideas like portable mortgages back into the conversation.

What this means for you right now

None of this changes anything about today's market. The MOVE Act is a bill, not law, and even its backers' own experts point out it could raise rates rather than lower them. If you're sitting on a low rate and wondering whether to move, that decision still comes down to today's numbers, not a policy that may or may not happen. If you want to talk through what moving would actually look like for your situation, reach out and let's run the numbers together.