A little more than a week ago, Bill Pulte, director of the Federal Housing Finance Agency, made quite a splash when he announced that the Trump administration was working on a 50-year mortgage plan. While this headline dominated news and social media, another announcement with far greater potential for unlocking the housing market received much less attention.
A few days later, the administration floated the idea of allowing portable and assumable mortgages. With interest rates remaining stubbornly high—much to the frustration of homeowners and policymakers alike—these mortgage innovations could help unfreeze a housing market that has been largely stalled by the "lock-in effect," where homeowners with low rates are reluctant to sell.
What Are Portable Mortgages?
Portable mortgages are exactly what they sound like: you can take your current mortgage with you when you purchase a new home. Here's how it works:
Example: A Growing Family's Move
A young family purchases their first home in 2020:
2020 Purchase:
- Home price: $327,000
- Down payment (10%): $32,700
- Mortgage (30-year): $294,300
- Interest rate: 3.0%
- Monthly payment (principal and interest): $1,240
Fast forward to 2025. Their family has grown, and they've outgrown their starter home.
2025 Situation (5 years later):
- Current home value: $411,000
- Remaining mortgage balance: $261,650
- Built equity: $149,350
They find a home that fits their needs, priced at $600,000.
Buying the New Home in 2025:
- New home price: $600,000
- Portable mortgage (from old home): $261,650 @ 3.0%
- Equity from sale (down payment): $149,350
- Additional financing needed: $189,000 @ current rates (~6.3%)
- Payment on new financing: $1,170
- Total monthly payment: $2,410
Compare this to financing the entire purchase at today's rates:
- New loan amount: $450,650 ($600,000 - $149,350 equity)
- Monthly payment at 6.3%: $2,790
The savings: By porting their existing low-rate mortgage, this family saves $380 per month, or $4,560 per year—and over $136,000 over the life of the loan.
What Are Assumable Mortgages?
Assumable mortgages work differently: instead of the seller taking their mortgage to a new home, the buyer takes over the seller's existing mortgage. This can be particularly attractive when sellers locked in rates around 3% years ago, while today's buyers face rates above 6%.
The buyer assumes responsibility for the existing mortgage with its favorable rate and covers the difference between the mortgage balance and purchase price through either a larger down payment or a second mortgage (as shown in the portable mortgage example above).
What's Next?
While details are still being worked out for how this would function in the U.S., both Canada and the European Union already offer portable and assumable mortgages in their markets, providing a potential template for American implementation.
These mortgage solutions could address one of the housing market's biggest challenges: helping homeowners move without sacrificing the low rates they secured years ago, while giving buyers access to more affordable financing options.