You cannot transfer your mortgage interest rate to a new home in the United States. Nearly every U.S. residential mortgage contains a due-on-sale clause that requires the full loan balance to be paid off when you sell the property, which means your rate ends the day the sale closes. Portable mortgages exist in Canada and the United Kingdom, but no equivalent product is offered here. The closest workaround runs the other direction: a buyer purchasing your current home may be able to assume your loan and inherit your rate, but only if it’s a government-backed mortgage.
Why Your Rate Doesn’t Follow You
The barrier is contractual and reinforced by federal law. A due-on-sale clause gives the lender the right to declare the entire loan balance immediately due when the property securing it is sold or transferred without the lender’s written consent. Federal statute explicitly authorizes lenders to include and enforce these clauses, preempting any state law that would restrict them.1Office of the Law Revision Counsel. 12 USC 1701j-3 Preemption of Due-on-Sale Prohibitions The rule applies to federally and state-chartered lenders alike.2eCFR. 12 CFR Part 191 Preemption of State Due-on-Sale Laws
So when you close on the sale of your house, your lender gets paid off in full. There is no mechanism to ask them to swap the collateral and let you keep the old terms on a different property. Your next home requires a brand-new mortgage priced at whatever rates the market is offering that day.
The Narrow Exceptions Don’t Help Movers
Federal law protects a short list of transfers from due-on-sale enforcement: transfers to a spouse or child, inheritance after the borrower’s death, placing the home in a living trust where the borrower remains the beneficiary and occupant, and leases of three years or less.1Office of the Law Revision Counsel. 12 USC 1701j-3 Preemption of Due-on-Sale Prohibitions Every one of these involves keeping the same property. A standard sale followed by a purchase of a different home triggers the clause with no exception available.
Why Portability Exists Abroad but Not Here
Canadian and British mortgages are typically fixed for two to five years, not thirty. When a Canadian homeowner sells and buys another property, they can carry the existing rate and remaining balance to the new home; if the new home costs more, they take out additional financing at current rates and end up with a blended rate. Lenders can offer this because the interest-rate risk they’re absorbing runs a few years, not decades. A U.S. lender letting borrowers port a 30-year fixed rate would be locked into honoring below-market rates for the life of the loan every time rates climbed. That structural difference is why portability never developed as a U.S. product.
Assumable Loans: The Closest Thing Available
Your rate cannot travel with you, but it may be able to stay with your house. In a mortgage assumption, a buyer takes over your existing loan, including the balance, term, and interest rate, instead of getting a new mortgage. Assumption is generally only available on government-backed loans. Conventional loans sold to Fannie Mae or Freddie Mac almost always prohibit it.
Three loan types are typically assumable: FHA loans insured by the Federal Housing Administration, VA loans guaranteed by the Department of Veterans Affairs, and USDA loans backed by the Department of Agriculture. If you hold one of these with a below-market rate, marketing that fact can attract buyers and potentially support a higher sale price.
FHA Assumptions
FHA mortgages are assumable, but for any loan originated on or after December 1, 1986, the lender must run a creditworthiness review on the buyer before approving the transfer. The buyer needs a valid Social Security Number or Employer Identification Number and has to meet FHA credit standards.3HUD. Are FHA-Insured Mortgages Assumable The lender can enforce the due-on-sale clause if the buyer fails that review.4eCFR. 24 CFR 203.512 Free Assumability Exceptions
Once the assumption goes through, insist on a formal release of liability. Without one, you can remain personally liable if the buyer later defaults. Many sellers don’t realize they’re taking that risk until something goes wrong.
VA Assumptions
VA loans are assumable and, importantly, the buyer does not need to be a veteran. Any creditworthy buyer can assume a VA loan with lender approval, and the loan must be current at the time of transfer. The buyer has to meet the same credit standards as a veteran applying for a new VA loan.5Office of the Law Revision Counsel. 38 USC 3714 Assumptions Release From Liability A funding fee of 0.5% of the loan balance applies.
There’s a catch specific to VA sellers. If a non-veteran assumes your VA loan, your VA entitlement stays tied up in that loan until it’s paid off. That can prevent you from using your full VA benefit on your next home purchase. Getting a release of liability from the VA requires the assuming buyer to meet all qualification standards.
The Equity Gap That Sinks Most Assumptions
Even when a loan is assumable, the numbers usually don’t work. Home prices have climbed sharply since most of today’s low-rate loans were written, so the buyer assumes only the remaining loan balance and has to pay the seller the difference between the sale price and that balance in cash.
If you took out a $400,000 FHA loan in 2021 at 2.75% and now sell the home for $600,000, the buyer needs roughly $200,000 in cash to close, on top of taking over your loan. Most buyers don’t have that. The question then becomes whether they can bridge the gap with secondary financing. The VA has said secondary borrowing is generally permitted alongside a VA loan assumption, provided the VA loan keeps its first-lien position.6Veterans Benefits Administration. VA Circular 26-24-17 Finding a lender willing to offer that second loan on workable terms is a separate hurdle, though some lenders and fintech companies are building products around assumption deals.
Expect the Servicer to Slow You Down
Mortgage servicers have little financial reason to process assumptions quickly. A new loan at today’s rate generates fees for the originator and a higher-yielding asset for the investor. An assumption just continues a low-rate loan that pays everyone less. VA rules require servicers to evaluate assumption applications within 45 business days, but timelines often stretch into months. There’s no centralized listing service for assumable loans, so buyers looking for one have to piece the search together themselves.
What You Can Do With a Low Rate Right Now
If you’re holding a low rate and need to move, the realistic paths are these. Sell and accept a new mortgage at current rates, treating the old rate as a benefit you’ve already used. Rent the current home out to preserve the loan while financing the next one separately, if you can qualify for the second mortgage. Or, if you have an FHA or VA loan, put the assumable rate in your listing and let it help you find a buyer, understanding that the closing will take longer and the buyer will need substantial cash to cover the equity gap.
For a buyer, hunting specifically for homes carrying assumable FHA or VA loans originated between 2020 and 2022 is the most direct route to a rate several points below the current market. The savings over the remaining life of the loan can reach six figures, which is why the longer timeline and the equity gap are often worth working through.