This article adheres to strict editorial standards. Some or all links may be monetized.
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.
That’s what The Ramsey Show hosts John Deloney and Ken Coleman told Lauren, of Detroit, Michigan, on a recent episode. She’s 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)
Must Read
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don’t have to deal with tenants or fix freezers. Here’s how
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP
- Robert Kiyosaki says this 1 asset will surge 400% in a year — and he begs investors not to miss its ‘explosion’
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,” Deloney said. “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 that every time a toilet overflows at her house, Lauren either has to drop everything to drive a four-hour round trip or hire a property manager. One takes time, and the other money.
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 cash toward buying a new property with her husband. Then they could 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 hovered near 6.27% in October 2025, according to Freddie Mac. (2)
To give that number some weight, consider that a $200,000 30-year loan at 2.875% would put Lauren’s monthly payment at roughly $830. Meanwhile, at 6.27%, she would pay about $1,234, which is approximately $404 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)
According to Governor Adriana D. Kugler of the Federal Reserve, higher mortgage rates reduce purchases by lower-income and younger buyers, contributing to weaker homeownership for those under 45. (4)
If Lauren decides not to buy a new home, and that being a landlord isn’t for her, another way to generate extra income could be to use a home equity loan.
With home values higher than ever, you can make your home work harder for you by making the most of your equity. The average homeowner sits on roughly $303,000 as of the fourth quarter of 2024, according to CoreLogic.
Having access to your home equity could help to cover unexpected expenses, pay substantial debt, fund a major purchase like a home renovation or supplement income from your retirement nest egg.
Rates on HELOCs and home equity loans are typically lower than APRs on credit cards and personal loans, making it an appealing option for homeowners with substantial equity.
Unlock great low rates in minutes by shopping around. You can compare real loan rates offered by different lenders side-by-side through LendingTree.
Just answer a few simple questions, and LendingTree will match you with up to 5 lenders with low rates today.
A rock-bottom mortgage rate is a strong incentive to hold, but it isn’t always a good reason to derail your family plan.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
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.
To get her head around this number, Lauren could use a budgeting app like Monarch Money to help track her payments.
Monarch Money puts all your finances under one roof, from your banking statements to your investments. This could make figuring out Lauren’s ownership costs an easier prospect. You can also add a spouse or partner to your dashboard, which means Lauren and her husband could take some financial first steps together.
And the best part? Monarch Money offers a seven-day free trial to see if it’s right for you. If you find it helpful, you could then snag 50% off with code WISE50.
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. If the stress of managing tenants, maintenance and vacancies outweighs the potential reward, that needs to be part of the calculation. An easy way to do this is to apply her hourly rate to that four-hour round trip, plus gas, as a minimum.
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.
When buying a new home, Lauren should make sure she gets the most competitive mortgage rate possible. It won’t come close to the rate she locked in years ago, but it’s still worth ensuring she and her husband try to get the best deal they can.
To help cut through the noise, Mortgage Research Center can offer you tools to compare mortgage rates, whether you’re looking to buy or refinance.
They can help you quickly compare rates and estimated monthly payments across multiple vetted mortgage lenders. All you have to do is enter some basic information about yourself — such as your ZIP code, desired property type, price range, and annual income — then you can get customized mortgage offers.
Once you choose your lender, you can even set up a free, no-obligation consultation to make sure you’ve found the right fit.
The bottom line
While a 2.875% mortgage rate is great, it shouldn’t be the sole 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.
If you’re struggling to find your own financial future, it may be helpful to speak with a registered financial planner to sort out your goals. One option is Advisor.com, which can match you with between one and three experts in just minutes
All you need to do is enter some basic information, like your ZIP code, and Advisor.com will match you with local fiduciaries that could help you meet your financial needs. From here, you can then book a free call with no obligation to hire to make sure they’re the right fit.
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.
What to read next
- Want to retire with an extra $1.3M? See how Dave Ramsey’s viral 7-step plan helps millions of Americans kill debt and build wealth — and how you can too
- I’m 49 years old and have nothing saved for retirement — what should I do? Don’t panic. Here are 6 of the easiest ways you can catch up (and fast)
- There’s still a 35% chance of a recession hitting the American economy this year — protect your retirement savings with these 5 essential money moves ASAP
- This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchase. Here’s how to buy the coveted asset in bulk
Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
The Ramsey Show (1); Freddie Mac. (2); Federal Housing Finance Agency (3); Federal Reserve (4)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.