In almost every case, you cannot keep your interest rate if you buy a new house. Nearly every U.S. residential mortgage contains a due-on-sale clause that requires the loan to be paid off in full when you sell the property securing it, and that payoff extinguishes your rate. A few narrow exceptions preserve a loan through certain family and estate transfers, and a product called a portable mortgage exists in other countries, but for the ordinary case of selling one home and buying another in the United States, the rate does not travel with you.
Why Your Rate Ends When You Sell
The obstacle is a single clause in your mortgage contract. Federal law under 12 U.S.C. ยง 1701j-3, part of the Garn-St. Germain Depository Institutions Act of 1982, gives lenders the right to include a due-on-sale clause in any real property loan. That clause lets the lender demand full repayment the moment you sell or transfer ownership of the property securing the loan.1Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions Virtually every conventional mortgage in the U.S. includes this language. When your sale closes, the old loan is paid off, the lien is released, and whatever rate you had (2.5%, 3%, 4%) is gone.
The federal statute also preempts state laws that once tried to limit due-on-sale enforcement, so the lender’s contractual right controls regardless of where you live.1Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions If you’ve heard your state is friendlier to borrowers on this point, the federal rule still wins.
Transfers That Don’t End the Loan
The same statute lists specific transfers where a lender cannot call the loan due, even though the property changes hands. For residential properties with fewer than five units, these protected transfers include:1Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions
- A transfer that happens automatically when a joint tenant or tenant by the entirety dies.
- A transfer to a relative when the borrower dies.
- Adding a spouse or children as owners of the property.
- A transfer to an ex-spouse under a divorce decree, legal separation, or property settlement.
- Moving the property into a revocable living trust where you remain a beneficiary and continue living there.
- Granting a subordinate lien, or leasing the property for three years or less with no purchase option.
These are the situations where your loan and rate survive a change in ownership. Notice what is not on the list: selling your home and buying a different one. The ordinary move-up transaction is exactly what the due-on-sale clause was written to cover, and no federal exemption protects it.
Portable Mortgages Are Not a Real U.S. Option
The product that would let you carry your rate to a new house has a name: a portable mortgage. It detaches your loan from the property you’re selling and reattaches it to the property you’re buying, keeping the same rate, balance, and term. The borrower stays the same; only the collateral changes.2Kiplinger. What to Know About Portable Mortgages
Portable mortgages are common in Canada and the United Kingdom, where major banks routinely offer porting windows of 30 to 120 days between selling one home and closing on the next. In the United States, they are essentially nonexistent. The Federal Housing Finance Agency has said it is “actively evaluating” the concept, but as of early 2026, no major U.S. lender or government-backed loan program offers a standard portability feature. A handful of credit unions have experimented with portability language, but nothing at scale.
If you happen to hold one of the rare U.S. contracts that includes portability, the mechanics look like a collateral substitution: the lender releases the lien on your old home and records a new one on the property you’re buying, and your rate and remaining balance carry forward. Expect the lender to re-verify your income and credit and to order a new appraisal, and expect the two closings to be tightly coordinated so there’s no gap in collateral. For the great majority of homeowners, though, this option is not on the table.
Assumable Loans Help Your Buyer, Not You
There’s a related concept people sometimes confuse with keeping their own rate: an assumable mortgage. Assumption lets a buyer take over the seller’s existing loan at its existing rate. It’s a genuine way to acquire a home at a below-market rate, but it works in the opposite direction from what you’re asking. It preserves a low rate for the person buying your house. It does not let you carry that rate to your next one.
All FHA-insured mortgages are assumable. For loans closed on or after December 15, 1989, the lender must run a full credit qualification on the buyer, and the buyer typically has to cover the seller’s equity in cash or with a second loan.3U.S. Department of Housing and Urban Development. Chapter 7 – Assumptions VA-backed loans are also assumable, and the buyer does not have to be a veteran, as long as the loan is current and the buyer meets VA underwriting standards.4Veterans Benefits Administration. Circular 26-23-10 A 0.50% funding fee applies to VA loan assumptions.5Veterans Benefits Administration. Funding Fee Schedule for VA Guaranteed Loans One thing to watch if you’re a veteran seller: if a non-veteran assumes your VA loan, your entitlement stays tied up until that loan is paid off, which limits your ability to use VA financing on your next home.
Most conventional mortgages backed by Fannie Mae or Freddie Mac are not assumable in a standard sale. The due-on-sale clause applies, and the lender will call the loan. Assumption on a conventional loan is protected only in the family and estate transfers listed above.
So if you’re selling a home carrying a 3% FHA or VA loan, that rate can be a real selling point for your buyer, but you’ll still face current market rates on your next purchase.
How to Lower the Rate on Your Next Loan
Since your existing rate almost certainly won’t travel, the practical question is how to reduce the rate on the new financing.
Discount points are the most direct tool. One point costs 1% of the loan amount and typically cuts your rate by about 0.25%. On a $400,000 mortgage, buying two points would cost $8,000 upfront and could lower your rate by roughly half a percentage point. Whether that math works depends on how long you plan to stay; the breakeven where monthly savings recoup the upfront cost usually lands somewhere between four and seven years, depending on the size of the rate reduction and the loan.
Seller concessions are another lever. In a buyer-friendly market, you can negotiate for the seller to cover part of your closing costs or contribute toward a rate buydown. Temporary buydowns, where the seller funds an account that subsidizes your payments for the first one to three years of the loan, have grown more common since rates rose.
A shorter loan term is worth pricing out too. Fifteen-year fixed rates run meaningfully lower than 30-year rates. The monthly payment is higher, but the total interest paid drops substantially. For a homeowner leaving a very low rate with significant equity to roll into the next home, a shorter term on the new loan can take some of the sting out of the higher rate.