Should You Sell Your 3% Mortgage? Let’s Do the Math (Long Island Edition)

If you’re holding a 3% mortgage rate, you’re not alone in hesitating to let that go. It’s like having a VIP backstage pass to a concert where everyone else is stuck in general admission. That rate is gold. But what if I told you the real question isn’t “why would I give that up?”—it’s “what would I gain if I moved?”

Let’s break this down using real numbers from our own backyard—Long Island. Because while mortgage rates are hovering around 6%, the bigger picture tells a different story when we actually do the math.

🔢 The Scenario: A Real Long Island Seller

Let’s say you bought your starter home in 2021 for $525,000 with 10% down. That’s a $52,500 down payment and a $472,500 mortgage at roughly 3% interest. Fast forward to today, and your home is worth $680,000 in this red-hot, low-inventory market. You listed it for $629,900 and had buyers competing to give you $680K (which is happening often right now).

Here’s what your numbers look like:

💰 Equity Snapshot (After Selling Costs):

• Current Market Value: $680,000
• Estimated Selling Costs (5%): -$34,000
• Net Sale Proceeds: $646,000
• Remaining Mortgage Balance (approx.): -$440,000
• Net Equity After Sale: $206,000

If you've also saved up $30,000 separately, your total available funds for the next purchase are about $236,000.

🏡 The Upgrade: Buying at $800,000 Today

Let’s say you’re upgrading to a larger home—maybe for a growing family, a home office, better school district, or just more space to live your life fully. You’ve found a new home for $800,000.

💵 New Purchase Math:

• Purchase Price: $800,000
• Down Payment (Equity + Savings): $236,000
• New Loan Amount: $564,000
• New Interest Rate: ~6.25%
• Estimated Monthly Mortgage Payment (Principal & Interest): ~$3,470
• Estimated Property Taxes (Annually: $14,500): ~$1,208/month
• Total Monthly Housing Payment: ~$4,678/month

Compare that to your current home:

🏠 Current Home Monthly Costs:

• Loan Balance: ~$440,000 at 3%
• Monthly Principal & Interest Payment: ~$1,860
• Estimated Property Taxes (Annually: $12,000): ~$1,000/month
• Total Monthly Housing Payment: ~$2,860/month

🤔  So Why Would You Do This?

What You’re Trading:

• A historically low rate
• A lower monthly payment—but a home you’ve outgrown
• Less space, outdated layout, longer commute, or limited functionality

What You’re Gaining:

• A long-term home that fits your life today and tomorrow
• A chance to use over $200,000 in equity to reduce your new loan
• A home in a neighborhood you actually want to live in
• A hedge against rising home prices

📈 The Price of Waiting

Home price forecasts from Fannie Mae and other experts show steady growth over the next 5 years. If that $800,000 home grows just 4% a year, it could be worth over $975,000 by 2029. That’s a $175,000 difference—just for waiting.

And while mortgage rates may dip a bit in the future, most experts agree we’re not heading back to 3%. If rates only come down slightly (say, into the mid-5s), and prices go up by tens of thousands, you could end up paying more later—even with a better rate.

⁉️ The Real Question

Yes, your monthly payment might increase by around $1,800 per month, but what are you gaining in return?

If a move is even remotely on your horizon, the best thing you can do is run the numbers now. That low mortgage rate has served you well—but it shouldn’t keep you stuck in a home that no longer fits.

So the better question to ask isn’t “why would I move?” It’s:

“When do I want to start living in the home that actually fits my future?”

✅ Bottom Line

Your 3% mortgage rate is great—but it doesn’t give you more space, a better commute, or the lifestyle upgrade you’ve been thinking about. If you’re starting to outgrow your current home, let’s talk now—before rates shift again or prices climb even higher.

Want to see the numbers for a different price point? Just reach out. I’ll help you break down your options so you can make a smart, informed move when the time is right.