Why You Can’t Take Your Low Mortgage Rate to a New Home

With mortgage rates on a brutal climb, Congress has once again brought up the idea of creating portable mortgages.The idea might sound good, but it could have huge implications for the U.S. housing market and would be more difficult to implement than it may seem.A portable mortgage would allow you to take your existing mortgage—and its rate—with you when you move to a new home. Congressional leaders proposed the idea a few times as a solution to rising housing costs. But experts say things would get complicated and quickly.Also, the idea might not bring the affordability relief that leaders hope for. Realtor.com® senior economist Jake Krimmel says it could actually make the market less affordable."Investors of mortgage-backed securities in a world of portable mortgages would demand compensation for that uncertainty around a different pre-payment risk schedule as well as the new unpriced risk that comes from porting a mortgage to a new home," Krimmel says. "And those latter two new risks could translate into higher mortgage rates."The latest bill in Congress to create a portable mortgage, the Making Ownership Viable for Everyone, or MOVE Act, was introduced by Rep. Thomas Kean (R-NJ...