Portable Mortgages Could Help More People Move — But Won’t Fix Housing Affordability

The idea of “portable mortgages” — loans that homeowners can transfer from one property to another — is gaining national attention as policymakers consider new tools to ease the country’s housing affordability and mobility challenges.

In late 2025, the Federal Housing Finance Agency (FHFA), led by Director Bill Pulte, said it is “actively evaluating” the feasibility and risks of mortgage portability. This proposal was one of three floated to the public in late 2025, alongside 50-year mortgages and crypto-backed mortgages.

Portable mortgages are common in Canada but have been virtually nonexistent in the U.S., where mortgages are tied to individual properties and packaged into mortgage-backed securities – a structure that makes portability difficult today.

If adopted, homeowners could move to a new home and keep their existing mortgage rate, balance, and term instead of taking on a new — and likely higher-rate — loan. Proponents say this shift could unlock housing inventory and make it easier for people to move. But experts warn that portability could also widen gaps between homeowners with low rates and buyers entering the market for the first time, while disrupting the mechanics of the U.S. mortgage system.

What is a portable mortgage?

A portable mortgage allows borrowers to transfer their current mortgage — including the interest rate, remaining balance, and term — from their existing home to a new one.

For example: A homeowner with a 3% fixed-rate mortgage who buys another home could “port” that mortgage rather than refinance at today’s higher rates. 

Key advantages of mortgage portability include:

• Keep your existing interest rate
• May help avoid prepayment penalties, where applicable
• Maintain the same terms and amortization
• Work with the same lender

Important note: Portability is widely available in Canada, but U.S. mortgages are generally not portable. There is no formal program or rollout timeline, though federal regulators are now studying the idea in response to record-low mobility and housing supply constraints.

Why portable mortgages are back in the spotlight

The renewed interest in portability comes at a time when the U.S. housing market is facing:

• High interest rates, keeping buyers on the sidelines
• Historically low mobility, as homeowners avoid giving up pandemic-era rates
• Chronic inventory shortages, especially in major metros

Proponents argue that letting homeowners keep their low rates could help alleviate the “lock-in effect,” a term used to describe how millions of households feel unable to move because they would face substantially higher mortgage costs.

Key arguments in favor of portability:

• Unlocking inventory: Many homeowners remain “locked in” to cheap, pandemic-era mortgages (often below 4%). Allowing them to port those loans could free up housing supply at a time when inventory is desperately needed. 
• Reducing transaction costs: Sellers avoid prepayment penalties and buyers using existing loans avoid higher interest rates.
• Renewed mobility: People might relocate for jobs or lifestyle reasons without fear of losing favorable mortgage terms.

That said, various stakeholders have raised serious reservations:

• The structure of U.S. mortgage-backed securities relies on each mortgage being tied to a specific property. Portability would require reinventing this system, which critics say is “not compatible” with the existing securitization model.
• Portability would likely advantage current homeowners with low rates — potentially widening the divide between “rate-rich” sellers and first-time buyers.
• There’s no guarantee portability, even if adopted, would improve overall affordability — property prices may rise, and demand could spike as buyers with cheap financing bid aggressively.

Chen Zhao, head of economic research at Redfin, notes that portability would face steep legal and financial barriers, stating:

“Portable mortgages face significant legal hurdles because making mortgages portable would change the underlying value to MBS investors of the mortgage. Even if the hurdles were overcome, the change would benefit existing homeowners and not improve affordability for first-time homebuyers because they do not have an existing mortgage with an ultra-low rate.”

Zhao added that because first-time buyers don’t already hold low-rate mortgages, portability would do little to improve affordability for the segment of the market most affected by high housing costs.

What FHFA is evaluating

Federal officials are considering portability as a response to the historically slow housing market. Their review includes:

• Whether portability could free up inventory by encouraging more homeowners to sell
• How portability would interact with mortgage-backed securities and investor expectations
• Whether lenders could implement portability without raising rates on new loans
• The potential effects on first-time buyers who may not benefit from porting
• Whether portability could reduce regional economic friction by encouraging relocations

While no program has been announced, the FHFA has signaled ongoing research and early discussions with industry partners.

How portability (if adopted) could shift the U.S. housing market

If portable mortgages become available in the U.S., the effects could be significant:

• More existing homes hit the market: Many homeowners reluctant to sell because of low mortgage rates might feel comfortable moving.
• Home prices may rise: Because porters bring cheap financing (low rate) into the market, they’ll be more competitive than buyers taking on new high-rate loans — this could bid up prices.
• Increased competition between porters and new buyers: Renters and first-time homebuyers may find it harder to compete, reducing affordability for newcomers.
• Mortgage market under stress: The structure of mortgage-backed securities could be disrupted if many mortgages aren’t paid off, potentially leading to higher rates or tighter credit standards.

In short: portable mortgages may ease the “lock-in” problem and get more houses moving — but they don’t automatically solve affordability or supply shortages, and could create new distortions of their own.

Who would benefit (or not) if U.S. portability becomes available

Potential winners:

• Homeowners with pandemic-era 2–4% mortgage rates
• Sellers who want to move but avoid refinancing penalties
• Buyers upgrading to more expensive homes

Potential losers / those who should be cautious:

• First-time buyers competing against low-rate borrowers
• Renters unable to access low-rate financing
• Buyers in new construction markets, where builders may raise prices if demand increases
• Borrowers reliant on building equity quickly

What happens next and what homeowners should watch

The FHFA and U.S. regulators are studying how such a program could be structured, but as of now, portability remains a proposal, not a guarantee. Even if approved, implementation would likely take years and require major changes to how mortgages are securitized, underwritten, and sold.

In the meantime, homeowners should:

• Monitor policy announcements from FHFA and Congress
• Consult with lenders and mortgage brokers about portability eligibility and implications
• Compare portability vs. refinancing vs. a new mortgage (including long-term costs vs. short-term benefits)

As policymakers continue to study mortgage portability, the coming months may determine whether the U.S. adopts a system that could reshape how Americans move, buy, and finance homes.

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