The Cost of Staying Put: Is Your Low Rate Holding You Back?

It's human nature to cling to what feels safe and familiar. But sometimes, the familiar can give a false sense of security. For many homeowners, that security comes in the form of a low mortgage rate that they don’t want to give up.

If you bought or refinanced during the pandemic housing boom, you likely scored a great deal at the time: Rates had fallen to unprecedented levels, reaching an all-time low of 2.65% in January 2021.[1] Today, more than half (51.5%) of mortgage holders still have rates under 4%,[2] contributing to what’s known as the “lock-in-effect” — when homeowners delay selling to avoid giving up their ultra-low rate for a higher one.

The idea of letting go of such a low rate can feel counterintuitive — or downright painful. Perhaps you want to move, but you can’t justify trading a 3% or 4% rate for a 6% one.

Maybe the math just doesn’t check out for you. Or does it?

In a recent survey, one in four homeowners with rates below 5% said no amount of money could convince them to give up their current rate for today’s — and another 25% said they'd need at least $200,000 to consider it.[3] But that's a conclusion drawn without all the facts. What if the math tells a different story?

If your life and home needs have changed since you got your mortgage, consider what that low rate might be costing you.

The quality-of-life cost

Staying in a home that no longer fits your life comes with real tradeoffs — and not just financial ones. Maybe it's the home office you've cobbled together in a corner of your bedroom, affecting your focus and your boundaries between work and home. Maybe it's a commute that doubled when you changed jobs, stealing hours that could be spent with family. Maybe it's the storage unit you're renting because your family has outgrown your home’s closet space.

These are the hidden costs that gradually shape your daily life. They compound over time, costing more energy and peace of mind with every passing month.

The appreciation cost

The mortgage rates we saw during the pandemic were a historic anomaly, not the norm. And most economists agree we're unlikely to see those levels again anytime soon. So, if you’re waiting for rates to drop, you might be waiting a long time. In the meantime, the home you want may be getting more expensive.

In many markets, home values have continued to rise (keep in mind, appreciation varies by market, so it’s important to understand yours). Imagine you’re eyeing a $400,000 home today; at a 2% appreciation rate, that home could cost you $8,000 more if you wait another year. Even if rates drop, it could take years to break even on that price increase.

	Buy Today	Wait 1 Year (Rates Hold)	Wait 1 Year (Rates Drop 0.75%)
Home Price	$400,000	$408,000	$408,000
Down Payment (20%)	$80,000	$81,600	$81,600
Loan Amount	$320,000	$326,400	$326,400
Interest Rate*	6.25%	6.25%	5.50%
Annual Percentage Rate (APR)*	6.40%	6.40%	5.64%
Monthly Payment (P&I)	$1,970	$2,009	$1,853
Break-Even Point	—	Never	5.7 years to recoup the $8,000 price increase

*The sample rates shown are neither an advertisement, an estimate, nor an offer to lend. Rates are for illustrative purposes only and do not represent actual terms being offered. The annual percentage rate (APR) is the cost of credit over the term of the loan expressed as an annual rate. The APR shown assumes a 1% origination fee, $1,000 in other fees, and pre-paid (per diem) interest calculated at the 30-year fixed mortgage rate for 15 days. Monthly payment reflects principal and interest only and does not include applicable taxes and insurance. Rates, terms, and eligibility vary by borrower and are subject to change. This is not a commitment to lend.

The equity opportunity cost

It's easy to lose sight of the forest when one tree — your interest rate — is blocking the view. But if you look beyond the rate, you might find that you already have the key to unlocking the life you want: your home equity.

Today’s homeowners hold nearly $17 trillion in total equity, with the average borrower sitting on more than $300,000 .[4] And with that equity as a down payment on a new home, your monthly payment — even at a higher interest rate — may be more manageable than you think.

Consider this: If you have $200,000 in equity to put toward a $500,000 home, that’s a 40% down payment (loan amount of $300,000). At a 6.25% interest rate (APR 6.40%*), your monthly principal and interest would be roughly $1,847 — less than the $1,970 you'd pay on a $400,000 home with just 20% down.*

A more expensive home. A lower monthly payment. That's what equity can do.

But that’s just one option. You could purchase a less expensive home or put less money down. You could even use some of your equity to buy down your interest rate — which could deliver instant savings with a shorter break-even period than waiting for rates to drop while prices rise. And as the break-even comparison chart shows, that rate drop may never come.

Tallying up the costs

Financial decisions are never just financial, especially when it comes to something as personal as where you live. In today’s economy, the urge to hold on to what feels like a safety net is completely reasonable. But don’t let the fear of what you might lose overshadow what you could gain in exchange.

In some cases, trading a low rate for a higher one can actually be the smarter move. That doesn’t mean selling and relocating is the right choice for everyone, but it’s important to make that decision based on the full picture — not just the number on your interest rate.

If you’re curious what the math looks like for you specifically, reach out to your Loan Officer. Knowing your real numbers can give you the clarity you need to decide what’s right for your next chapter.

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*The sample rates shown are neither an advertisement, an estimate, nor an offer to lend. Rates are for illustrative purposes only and do not represent actual terms being offered. The annual percentage rate (APR) is the cost of credit over the term of the loan expressed as an annual rate. The APR shown assumes a 1% origination fee, $1,000 in other fees, and pre-paid (per diem) interest calculated at the 30-year fixed mortgage rate for 15 days. Monthly payment reflects principal and interest only and does not include applicable taxes and insurance. Rates, terms, and eligibility vary by borrower and are subject to change. This is not a commitment to lend.

Sources:

[1] Freddie Mac, Primary Mortgage Market Survey.

[2 ] ICE Mortgage Monitor, February 2026.

[3 ] Storable’s 2026 Moving Forecast.

[4 ] ICE Mortgage Monitor, March 2026.