If you got a mortgage in 2020 or 2021, you may have what seems like an unbeatable deal. But falling in love with your mortgage rate could be a bad life decision.
On a recent episode of The Ramsey Show, hosts John Deloney and Ken Coleman gave similar advice to Lauren in Detroit, Michigan, who is moving in with her husband after three years of marriage. He rents, while she owns a home with about $100,000 in equity and a 2.875% fixed mortgage rate [1].
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Lauren asked if she should keep the house and its once-in-a-lifetime mortgage rate and rent it out, but Deloney and Coleman offered a blunt response.
“Sell it today and put $100,000 down on a new house,” said Deloney. “Who cares about that stupid interest rate, man. People are parking their whole lives on this once-in-a-millennium interest rate.”
“It’s just not worth it, that’s why we were so quick to just say ‘sell it’ and move on,” added Coleman
Building equity by charging market-rate rent on a super-low interest rate loan may seem like a good deal, but the devil, as always, is in the details. Lauren and her husband are planning to live in a location that’s a two-hour drive away from her house, which would make her an absentee landlord. This means every time a toilet overflows at her house, Lauren either has to drop everything to drive four hours round trip, or she has to hire a property manager.
Meanwhile, if her house payment isn’t far below the market rate for her rental, the profit she makes could get eaten up entirely by maintaining her property. Moreover, as a landlord she has to deal with potential liability and legal hassles if her tenants are unhappy.
Assuming she can sell her property and clear $100,000 after paying off the remainder of her mortgage, she could put that money toward buying a new property with her husband, and they both will build equity together rather than spending money on rent.
Yes, the interest rate on the new place will be higher than her current rate, but Deloney and Coleman’s guidance is clear: don’t freeze your life for a sub-3% rate.
Why a great rate can make homeowners feel locked in
Lauren is in a similar position to millions of other Americans. Her 2.875% mortgage rate is far below today’s average 30-year fixed rate, which has hovered near 6.3% in September 2025, according to Freddie Mac [2].
To give that number some weight, consider that a $200,000 30-year loan at 2.875% puts Lauren’s monthly payment at roughly $1,200. Meanwhile, at 6.3% she’s paying about $1,613, which is approximately $413 more per month.
That gap creates a powerful “lock-in” effect. Federal housing researchers found that when market rates exceed a homeowner’s original rate by one percentage point, the chance of that home getting sold falls by about 18%. Consequently, the low rate lock-in effect has meaningfully reduced sales since 2022, according to the Federal Housing Finance Agency [3].
High rates also squeeze first-time buyers and younger households, which depresses transactions and keeps inventory tight. Governor Adriana D. Kugler of the Federal Reserve has noted that higher mortgage rates reduce purchases by lower-income and younger buyers, contributing to weaker homeownership for those under 45 years old [4].
A rock-bottom mortgage rate is a strong incentive to hold, but it is definitely not a reason to derail your family plan.
Read more: How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
What to do with a second home that has a great rate
To figure this out, Lauren can start by verifying today’s market rent using at least three comparable listings or recent leases to see what the property could realistically earn.
Next, she should outline every cost of ownership, including mortgage payments, property taxes, insurance and a repair reserve equal to about one percent of the home’s value each year.
Once these numbers are clear, Lauren can calculate whether the rental would generate meaningful positive cash flow. If the figure hovers near the break-even mark, that is usually a strong sign that it makes more sense to sell.
Beyond the math, Lauren should consider the hassle factor as well. If the stress of managing tenants, maintenance and vacancies feels heavier than the potential reward, that needs to be part of the calculation.
Finally, if selling seems more practical, Lauren can estimate how much money she would walk away with after paying off the mortgage, covering agent commissions and handling any taxes. Once she knows the net proceeds, she can put that money to work in a joint budget with her spouse so every dollar has a clear purpose.
The Bottom Line
While a 2.875% mortgage rate is great, it’s not exactly a great reason to delay your marriage’s financial plan. The data shows that low fixed rates make homeowners reluctant to move, and that reluctance can stall bigger goals.
As Deloney and Coleman pointed out, the rental math has to be spectacular to make it worth the cost. To keep life simple and moving forward, the better choice for Lauren may be to bank the equity, unify her finances with her husband’s and make a decision that serves her life rather than her enviable interest rate.
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[1]. The Ramsey Show Highlights — You Tube. “Here’s Why You Shouldn’t Keep Your House”
[2]. Freddie Mac. “Archive”
[3]. Federal Housing Finance Agency. “The Lock-In Effect of Rising Mortgage Rates”
[4]. Federal Reserve. “A View of the Housing Market and U.S. Economic Outlook”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.