The 3% Mortgage Shackles: Should Miami Homeowners Sell?
Jenilyn Martinez September 3, 2026
Jenilyn Martinez September 3, 2026
A 3% mortgage has significant financial value, but it should not be the only reason homeowners remain in a property that no longer works for them.
For divorcing or separating homeowners, the two primary options are:
Both options usually mean giving up the 3% mortgage rate. The right decision depends on the home’s value, available equity, each owner’s finances, and whether one person can realistically afford the property alone.
I have recently worked with several Miami homeowners who want—or need—to sell but feel trapped by their 3% mortgage rate.
For some, the home simply no longer works. It may be too large, too small, too expensive to maintain, or no longer convenient for their lifestyle.
For others, the decision is connected to a divorce or separation. The relationship is ending, but neither person wants to give up an interest rate that may be impossible to replace in today’s market.
It creates quite a pickle for sellers: Do you hold on to the house because of the mortgage rate, even when holding on may no longer make sense?
The term describes the financial pressure homeowners feel when their existing mortgage rate is substantially lower than current rates.
As of September 3, 2026, the average rate for a 30-year fixed mortgage was 6.71%, according to Freddie Mac’s Primary Mortgage Market Survey. That is more than double a 3% mortgage rate.
The financial difference can make homeowners reluctant to sell, even when they have a compelling personal or financial reason to move.
Research from the Federal Housing Finance Agency found that for every percentage point by which current mortgage rates exceed a homeowner’s existing rate, the probability of that homeowner selling decreases by approximately 18.1%. The study estimated that mortgage-rate lock-in prevented approximately 1.33 million home sales between the second quarter of 2022 and the fourth quarter of 2023. Read the FHFA mortgage lock-in study.
This shows that the 3% mortgage dilemma is affecting homeowners throughout the country—not just here in Miami.
The estimated difference helps explain why homeowners feel stuck.
Mortgage amount | Payment at 3% | Payment at 6.71% | Monthly difference | Annual difference |
|---|---|---|---|---|
$500,000 | $2,108 | $3,230 | $1,122 | $13,460 |
$750,000 | $3,162 | $4,845 | $1,683 | $20,190 |
This illustration assumes a 30-year fixed-rate mortgage. Payments include principal and interest only—not property taxes, homeowners insurance, flood insurance, association fees, closing costs, loan fees, or mortgage insurance. Actual rates and payments will vary.
On a $500,000 mortgage, the estimated difference between 3% and 6.71% is more than $1,100 per month.
On a $750,000 mortgage, the difference is approximately $1,683 per month.
The value of the lower rate is real. However, the mortgage payment is only one part of the homeowner’s larger financial and personal picture.
A homeowner may hesitate to sell because replacing the mortgage will cost more, but staying can also carry significant costs.
Those costs may include:
A low mortgage rate does not automatically make a home affordable, functional, or sustainable.
The better question is not simply:
“How do I keep my 3% mortgage?”
It is:
“Which decision puts me in the strongest overall position for the next chapter of my life?”
When a couple owns a home together, the property is often one of the largest financial decisions involved in the divorce.
While every situation is different, the two primary real estate options are selling the home or having one owner buy out the other and refinance.
Selling the home may provide the cleanest financial separation.
At closing, the existing mortgage and other property-related obligations are paid. Selling expenses are deducted, and the remaining proceeds are distributed according to the owners’ agreement or legal instructions.
The disadvantage is that both owners give up the existing 3% mortgage rate.
However, selling may still be the better overall decision if neither person can comfortably afford the home alone or if a continued financial connection is no longer practical.
Before a divorcing couple makes that decision, I prepare a realistic estimate of the home’s current market value and expected net proceeds. This gives both parties actual numbers to review with their attorneys and financial advisors.
Property calculation | Amount |
|---|---|
Estimated market value | $1,000,000 |
Remaining mortgage balance | −$400,000 |
Estimated equity before selling costs | $600,000 |
This does not mean each owner would automatically receive $300,000. Selling expenses, liens, agreed credits, legal terms, ownership interests, and other financial considerations may affect the final distribution.
If one spouse wants to keep the home, that person may buy out the other owner’s share of the equity.
The buyout requires a source of funds. Depending on the circumstances, those funds may come from:
If both owners are named on the existing mortgage, the person keeping the property will generally need to qualify for a new loan under their name to remove the departing owner from the mortgage obligation.
That new loan will typically be based on current financing terms, which means the owner keeping the home will likely lose the existing 3% rate.
This is an important distinction:
Transferring the departing owner’s interest through a deed may remove that person from the title, but it does not automatically remove them from the mortgage.
For a clean financial separation, the remaining owner generally needs to complete the equity buyout, refinance the loan under their name, and transfer the departing owner’s interest in the property as directed by the parties’ attorneys.
Before choosing this option, the person keeping the home should determine:
Being approved for the refinance does not necessarily mean keeping the home is the best financial decision.
I understand why homeowners hesitate to leave a 3% mortgage behind. Depending on the loan balance, the difference in monthly payment can be substantial.
But I encourage my clients to look beyond the rate and evaluate the complete picture.
The existing mortgage should be considered as part of the decision—not allowed to make the entire decision.
This issue is particularly important for homeowners in Miami-Dade, where the cost of owning and maintaining a property can vary significantly.
A homeowner in Coral Gables, Coconut Grove, Pinecrest, South Miami, East Kendall, or another Miami neighborhood may need to consider:
A 3% mortgage may be attractive, but it does not protect the homeowner from rising insurance, taxes, maintenance, or association expenses.
The home may also have substantial equity that could help both owners move forward.
As a Miami Realtor® with Compass, I help homeowners understand the real estate portion of this decision before they commit to selling or completing a buyout.
That may include:
My role is not to decide how a couple should divide the home. That is a legal and financial decision.
My role is to provide clear, property-specific information so the owners and their advisors can make that decision using realistic numbers.
Keeping a 3% mortgage may feel like the safest financial option, but delaying the decision without reviewing the numbers can create other problems.
If the property will ultimately be sold, pricing and timing matter. An overpriced home that remains on the market may require larger reductions and create additional carrying costs.
For a closer look at this issue, read my previous article: The Hidden Cost of Waiting: How Days on Market Impacts Your Home Sale Price in Miami.
Your 3% mortgage has real financial value, but it should serve your life—not control it.
For divorcing or separating homeowners, the decision often comes down to two options:
Both options generally mean losing the 3% rate. The real question is whether keeping the rate is more valuable than achieving a clean financial separation and moving into a home that better supports each person’s future.
Jenilyn “Jenny” Martinez, Miami Realtor® with Compass, can prepare a confidential home-value and estimated-net analysis to help Miami homeowners understand the real estate numbers before making a decision.
The phrase describes homeowners who feel financially trapped in their current property because their existing mortgage rate is much lower than current rates.
Not necessarily. The rate is valuable, but homeowners should also consider affordability, maintenance, insurance, property taxes, location, space, future plans, and the financial consequences of remaining connected to another owner.
The existing mortgage is generally paid off from the sale proceeds at closing. After the mortgage and applicable selling expenses are paid, the remaining proceeds are distributed according to the owners’ agreement or legal instructions.
Yes, if the arrangement is agreed upon or established through the legal process. The person keeping the home needs a way to fund the other owner’s share of the equity and may need to qualify for a refinance under their name.
If the existing joint mortgage must be refinanced under one owner’s name, the new loan will generally be based on current rates and terms. That usually means losing the existing 3% rate.
No. The deed addresses ownership, while the mortgage addresses responsibility for the debt. Transferring someone’s ownership interest does not automatically release them from the mortgage obligation.
The starting point is usually the home’s market value minus the outstanding mortgage and other applicable obligations. The final amount may also be affected by ownership interests, agreed credits, liens, selling-cost considerations, and the terms of the divorce.
A Realtor® can provide an estimated market value, comparable sales, an assessment of the property’s condition, and an estimated seller net sheet. The owners can then review that information with their attorneys, lenders, accountants, and financial advisors.
Yes. Jenilyn can prepare a confidential market analysis and estimated-net calculation to help both owners understand the real estate numbers before deciding how to proceed.
This article is provided for general informational purposes only and is not legal, lending, accounting, or tax advice. Property rights, mortgage obligations, divorce terms, qualification requirements, and interest rates vary. Homeowners should consult the appropriate licensed professionals regarding their circumstances.
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