Study: 104,408 homeowners caught in mortgage rate limbo

Millions of Americans bought or refinanced homes during the ultra-low mortgage rate years, securing 30-year fixed loans at rates that now look almost impossible to replace.

But what once felt like a smart financial win may now be acting like a pair of golden handcuffs.

With today’s mortgage rates far higher than the pandemic-era lows, many existing homeowners face a painful trade-off: sell and move, but give up their low monthly payment; or stay put, even if their current home no longer fits their life.

In other words, the house may no longer fit, but the mortgage rate still does.

A new survey by Calgary Homes, a real estate platform, which polled 3,002 homeowners, set out to measure the scale of this “mortgage lock-in effect.” The research looked at how many homeowners would like to sell, downsize, relocate, or buy a more suitable home, but are choosing not to because they do not want to give up their existing mortgage rate.

The survey found that 31% of Texas homeowners who want to sell are unwilling to do so because they want to hold onto the lower rate they secured previously. At a state level, this equates to an estimated 104,408 homes effectively caught in mortgage-rate limbo.

The findings suggest that the housing market is not just being shaped by affordability, inventory, or buyer demand. It is also being shaped by homeowners quietly asking themselves a very modern question: “Is moving worth losing my mortgage rate?”

For many, the answer appears to be no.

When Texas homeowners were asked whether they had delayed a major life decision because they did not want to give up their current mortgage rate, 35% said they had. The most common delay was moving closer to family, cited by 11% of respondents, followed by moving to a more affordable area, downsizing for retirement, and upgrading to a larger home.

The emotional picture was mixed. Some homeowners clearly feel grateful to have locked in a low rate, while others feel pinned down by it.

When asked which phrase best describes their current home situation, the largest group, 32%, said they feel comfortable staying where they are. Another 17% said they feel lucky to have their current mortgage rate. But there was also a clear strain beneath the surface:

• 11% said they feel frustrated that moving is so expensive.

• 9% said they feel financially trapped by their mortgage rate.

•8% said they feel stuck in a home that no longer fits their life.

•7% said they are actively planning to move anyway.

•16% selected none of the above. The survey also asked homeowners what best describes their current home. While 39% said their home still suits their needs, many others pointed to common reasons people might normally consider moving. For example, 12% said their home is too small, while 7% said it is too large. Another 9% said it is too expensive to maintain, and 8% said it needs repairs they would rather avoid.

Downsizing also appears to be getting caught in the mortgage-rate freeze. When asked whether they had delayed downsizing because moving would mean taking on a worse mortgage deal, 26% said yes. That means for some homeowners, especially those approaching or already in retirement, the classic downsizing move may no longer feel financially simple. A smaller home does not necessarily mean a smaller monthly payment if the new mortgage comes with a much higher rate.

The frustration is real, too. More than a quarter of respondents, 27%, said they had felt resentful that their mortgage rate made moving financially unrealistic.

Perhaps the starkest finding came when 15% of homeowners admitted they would accept a worse quality of life to keep their current mortgage rate.

Taken together, the findings point to a Texas housing market where some homeowners are not staying put because they love their home, but because leaving feels financially irrational.

“Low mortgage rates were once seen as a major win for homeowners, but for some, they have become a quiet constraint,” says a spokesperson from Calgary Homes. “The survey shows that the mortgage lock-in effect is not just about housing supply or monthly payments. It is also affecting life decisions, from retirement plans and family choices to career moves and where people feel able to live. Many homeowners may be sitting on a great rate, but not necessarily in a home that still works for them.”