For millions of homeowners, the decision to move has become less about whether they want a different home and more about whether they can afford to give up the mortgage they already have.
A homeowner may have bought a home several years ago with a mortgage rate in the 2%, 3% or 4% range. Today, replacing that mortgage could mean taking on a significantly higher rate, and potentially hundreds of dollars more in monthly payments. That has created what housing economists call the “lock-in effect.”
Homeowners aren't necessarily staying because their current home still works for them. They are staying because moving can mean giving up a mortgage payment they can comfortably afford and replacing it with one that may not fit their budget.
A newly proposed piece of legislation, H.R. 10028, the Making Ownership Viable for Everyone Act- or MOVE Act - could offer a new way out.
What Is the MOVE Act?
Introduced in the U.S. House of Representatives on August 3, 2026, the MOVE Act would require Fannie Mae and Freddie Mac to begin purchasing and securitizing qualifying portable mortgages within 180 days of enactment.
Under the proposal, an eligible homeowner could potentially sell their current home and transfer the interest rate, loan terms and remaining mortgage balance to a new property, provided the move occurs within 90 days.
In simple terms: You could potentially take your mortgage with you when you move.
That's significant because one of the biggest obstacles to moving today isn't necessarily the price of the next home. It's the mortgage attached to the home a homeowner already owns. The Bipartisan Policy Center has identified higher mortgage rates as a major contributor to the current lock-in effect, noting that a substantial share of outstanding mortgages carry rates below 3%.
The Homeowners Caught in the Middle
Consider a family that purchased a home in 2020 or 2021. They may have a $350,000 mortgage at 3%. Their monthly principal and interest payment might be around $1,475. But now their family has changed.
Maybe they have another child. Maybe they work from home. Maybe their children are getting older and need more space. Maybe the neighborhood no longer fits their lifestyle. Maybe they need a one-story home, a larger yard, a better school location or a home closer to work. They have outgrown the house, but not the payment.
That creates a difficult choice - Move into a home that better fits their life and potentially take on a much higher mortgage payment, or stay where they are simply because the existing payment is affordable. For some homeowners, the second option wins. This is the heart of the lock-in effect.
The Problem With “Just Sell and Buy Something Else”
On paper, moving may look simple:
Sell your current home → receive your equity → purchase another home.
In reality, homeowners have to consider much more than the difference between their current home's value and the next home's price.
They have to consider:
- Their existing mortgage rate
- Their new mortgage rate
- The size of the new loan
- Closing costs
- Moving expenses
- Property taxes and insurance
- The equity they will use for the next purchase
- And potentially the tax consequences of selling
That last issue - capital gains - is often misunderstood.
What About Capital Gains When You Sell?
Selling a primary residence does not automatically mean you will owe capital-gains tax on the entire increase in value. Under current federal tax rules, homeowners who meet the applicable requirements can generally exclude up to $250,000 of gain for an individual homeowner or $500,000 for married couples filing jointly. Generally, the homeowner must have owned and lived in the property as their principal residence for at least two of the five years preceding the sale, among other requirements.
For example, suppose a married couple purchased their home for $400,000 and later sells it for $700,000. At first glance, that appears to be a $300,000 gain. But the calculation isn't simply sale price minus purchase price. Certain selling expenses and qualifying improvements can affect the home's tax basis and the amount of gain.
If the couple qualifies for the $500,000 primary-residence exclusion, that $300,000 gain could potentially be excluded from federal taxable income.
That means capital gains may be much less of a barrier to moving for many longtime homeowners than they initially assume.
However, homeowners with significant appreciation, investment or rental use, previous home-sale exclusions, or other circumstances may have a taxable gain. Tax rules can also vary depending on the homeowner's individual situation, so anyone facing a substantial gain should consult a qualified tax professional.
Where the MOVE Act Could Make a Difference
Here's where the proposed MOVE Act gets particularly interesting.
The bill doesn't eliminate capital-gains taxes or change the existing home-sale exclusion. Instead, it potentially addresses another major financial barrier: the mortgage itself.
Imagine that same family has:
Current home: $550,000
Mortgage balance: $325,000
Existing mortgage rate: 3%
New home: $700,000
Without a portable mortgage, selling could mean paying off the 3% mortgage and financing the next home at today's higher rate. Under a portable mortgage structure, the family could potentially carry the existing mortgage terms and balance to the new property, subject to the program's eventual rules and lender requirements.
They would still need to finance the difference between the existing mortgage balance and the new home's purchase price, but the entire mortgage wouldn't necessarily have to be replaced at today's rate. That could dramatically change the math for some homeowners.
The Bigger Question: What Is Your Home Costing You to Stay?
This is the conversation homeowners should be having. A low mortgage payment is valuable, but it isn't the only consideration. A homeowner might be paying a very affordable mortgage while living in a home that no longer meets their needs.
Maybe the house has:
- Too few bedrooms
- No home office
- An impractical floor plan
- A yard that has become too much work
- A location that no longer makes sense
- A long commute
- Accessibility concerns
- Or simply not enough space for the way the family lives today
The question isn't simply, “Can I afford to move?” It may be, “What is the financial and lifestyle cost of staying?” That's an important distinction.
A Low Rate Isn't the Same as Low Cost
A homeowner with a 3% mortgage may feel like moving would be financially irresponsible. And in some cases, it may be. But homeowners shouldn't evaluate the decision based solely on their interest rate.
They should look at the entire financial picture. For example:
Stay in your current home:
- Lower mortgage payment
- No selling costs
- No moving expenses
- Keep existing interest rate
- But remain in a home that no longer meets your needs
Move into the home you need for your lifestyle:
- Potentially higher monthly payment
- Selling and purchasing costs
- Possible capital-gains considerations
- But a home that better fits your family, lifestyle and long-term plans
There isn't one right answer. The right answer depends on the numbers and on what the homeowner needs from their home.
Could Portable Mortgages Unlock More Inventory?
That's one of the most interesting possibilities behind the MOVE Act. If homeowners knew they could take a favorable mortgage with them, some may be more willing to sell. That could put more existing homes on the market. More listings could give buyers more choices and potentially help improve the overall flow of the housing market.
The goal isn't necessarily to make mortgages cheaper overnight. It's to make moving less financially punitive for homeowners who already have favorable financing. That's a very different approach to the affordability problem.
But There Are Still Questions
Because H.R. 10028 is only a proposed bill, homeowners shouldn't make a real-estate decision today assuming portable mortgages will become available.
The bill has been introduced and referred to the House Committee on Financial Services; it has not become law. Even if legislation passes, the details will matter.
Questions could include:
- Which existing mortgages would qualify?
- Would the mortgage have to be originated after a certain date?
- How would the new property be underwritten?
- What happens if the new home costs significantly more?
- Would the borrower have to qualify again?
- How would the additional financing work?
- Would lenders charge fees?
- What happens if the homeowner's financial circumstances have changed?
Those details could ultimately determine how useful portable mortgages become.
Don't Let a 3% Mortgage Keep You in the Wrong House Forever
The lock-in effect is real. But a mortgage is a financial tool—not the reason you bought a home in the first place. Your home is supposed to support your life.
For some homeowners, keeping a low-rate mortgage and staying put may be exactly the right decision. For others, the financial benefit of that mortgage may be keeping them in a home they've genuinely outgrown.
The proposed MOVE Act raises an interesting possibility: What if homeowners didn't have to choose between keeping an affordable mortgage and moving into a home that better fits their lives?
Portable mortgages could eventually give some homeowners that choice. Until then, the best approach is to look at the complete financial picture—not simply today's mortgage rate. Your current payment matters. Your equity matters. Potential capital gains matter. The cost of the next home matters. But so does the question that often gets overlooked: Is the home you're paying for still the home you actually want to live in?
If you're feeling stuck between a mortgage payment you love and a home you've outgrown, it may be worth running the numbers before deciding that staying is your only financially responsible option.
This article is for educational purposes only and is not tax, legal or financial advice. The MOVE Act is proposed legislation and is not currently law. Homeowners should consult their tax and financial professionals regarding their individual circumstances.