Portable vs. Assumable Mortgages: What’s the Difference?

What are portable and assumable mortgages?

In November 2025, the Trump Administration and the Federal Housing Finance Agency tossed out ideas on the internet for reigniting the real estate market.

They floated 50-year mortgages, which would increase initial homebuying power and lower monthly payments while saddling borrowers with higher debt loads for longer. More recently, they said they’re “actively evaluating” both portable and assumable conventional mortgages as a way to offset the lock-in effect.

But what are those loan types and are they viable options?

How portable mortgages work

Portable mortgages allow borrowers to hold onto their current loan balance and interest rate as they buy a new property. Purchase a cheaper home and your sale proceeds cut down your mortgage balance. Buy a pricier home and you cover the difference for the new loan balance.

About 52.5% of all borrowers have a mortgage rate below 4% and 80.3% below 6%, according to a Realtor.com report. Because of this, many homeowners don’t want to move since it would mean having to settle into a higher interest rate compared to their current home loan.

Theoretically, portable mortgages could partially dissolve the “lock-in effect” many homeowners have and increase the amount of affordable for-sale listings. While other countries feature portable mortgages, they may not be compatible with the U.S. lending system, according to Realtor.com Senior Economist Jake Krimmel.

“The U.S. mortgage system is built on securitization, where loans are pooled and priced based on the specific property backing them. Mortgages must be tied to the home where they originated so investors can assess collateral risk,” Krimmel said.

“Put simply, property-level characteristics can raise or lower the mortgage rate a borrower gets because of the risk associated with that type of property. If a mortgage became portable, the collateral (and therefore the risk profile of the entire pool) could change midstream. That breaks the current models of securitization. Investors and securitizers could presumably find ways to account for this risk moving forward, but higher risk means higher rates to compensate. Portable mortgages would also blow up prepayment and duration models, which underpin mortgage-backed security pricing.”

How assumable mortgages work

An assumable mortgage lets an incoming homebuyer take over the seller’s existing loan term, balance, and interest rate. The buyer also pays the seller the paid-off portion of their mortgage upfront, similar to a down payment.

Unlike portable mortgages, the U.S. already has assumable loans. However, they’re rarely available for conventional mortgages, unless you’re inheriting the property through death or divorce. Assumability is more common with FHA, VA, or USDA loans, but you need to meet the underwriting requirements for each type.

Similar to a portable loan, assumable mortgages would help new borrowers acquire more affordable financing and wouldn’t let historically low interest rates go to waste. A lender can help you determine if a mortgage is assumable and the steps you’d need to take to apply.

The bottom line

There currently is no timeframe for portable or assumable mortgages to enter the lending fray.

Before they can become a reality, “significant operational and risk issues must be addressed” and “underwriting and eligibility criteria will be key,” according to a National Association of Mortgage Underwriters op-ed.

If affordability is stopping you from becoming a homeowner, talk with a local lender about mortgages with low-to-no down payment requirements, look into financial assistance programs, and learn how to negotiate your interest rate.