Yes. Fixed-income markets price below-market coupons at a discount: a loan paying 3% in a higher-rate world is worth materially less than face value. That discount — roughly 10% of balance, often $40,000–$75,000 on a 2020–21 loan — is the value a borrower forfeits by repaying at par when moving.
Your low mortgage rate is worth real money. Here’s the math.
If you locked a mortgage at 2.5%–4% in 2020 or 2021, you own something most homeowners have never priced: below-market financing. Banks price it every day, a loan paying 3% in a 6% world trades at roughly 80 cents on the dollar in the secondary market.
Here’s the asymmetry nobody explains at closing: when you sell your home and pay off that loan, you pay 100 cents on the dollar, face value, for an asset the market says is worth 80. The difference doesn’t go to you. It simply vanishes from your side of the table.
How much is it, in dollars?
A quick approximation: the value of your rate is the gap between your rate and today’s rate, applied to your balance, over the expected life of the loan. On typical 2020–21 loans that works out to roughly 10% of your remaining balance, often $40,000 to $75,000.
Two real, documented examples (not projections): the McGovern family kept $41,107 on a ~$411,000 loan, and the Cameron family kept $95,409, both through a discounted-payoff program executed by their own credit union. (See the case studies.)
Why you’ve never heard this framed in dollars
The public conversation about “golden handcuffs” runs almost entirely on monthly-payment math, “I can’t trade my $1,800 payment for a $3,200 payment.” That’s real, but it hides the asset question. You don’t just have a low payment. You have a valuable financial position, and a traditional payoff forfeits it in full.
The government has measured the collective cost: FHFA research found rate lock-in prevented about 1.7 million home sales and pushed prices up roughly 7%. Fannie Mae reports 58% of the loans in its single-family book are below 4%.
What to do with this number
Compute yours before any move decision: balance × (today’s rate − your rate) × remaining years, roughly, or use the DREAM savings calculator.
Weigh every option against it, staying, renting the house out, selling, knowing what a traditional payoff costs you.
Ask your lender the question almost nobody asks: “Do you offer any program that preserves the value of my below-market rate if I sell, an assumption, a defeasance structure, or a discounted payoff?”
Takara is a B2B company: we build the DREAM discounted-payoff program for banks and credit unions, which is how we know this math. We never work with consumers directly, your path runs through your own lender. If you’re a financial institution, book a call.