As of the end of September, roughly half of outstanding first-lien mortgages had an interest rate under 4%, according to ICE Mortgage Technology data, underscoring the severity of mortgage rate lock-in effects anchoring home sales at multidecade lows.

But those lock-in effects are also driving major savings to millions of borrowers holding onto those subsidized pandemic-era mortgages, said a newly published report from Realtor.com, a home listings platform and real estate brokerage.

“For the typical mortgage holder, buying a home at today’s median price and current rates would mean finding about $1,100 more each month for principal and interest, before property taxes and insurance,” explained Danielle Hale, chief economist of Realtor.com, who was quoted in the analysis. That’s a roughly 85% payment gap nationwide.

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Markets with the widest gap between outstanding median principal and interest payments and new estimated payments in today’s elevated rate environment stand to experience the most pronounced impacts from lock-in effects, said Hale.

Portland, Maine, and San Jose, Calif., claimed the widest gaps between current median mortgage payments and estimated new monthly payments in September, when typical 30-year rates averaged just under 7.4%, according to Freddie Mac data.

Massive appreciation in home prices since 2020 has amplified the hit to purchasing power exacted by elevated rates, as prospective borrowers are forced to assemble larger downpayments for mortgages with larger loan amounts.

In Portland, the estimated median principal and interest payment of $3,392 in September dwarfed the city’s current median payment amount of $1,270. In the much pricier market of San Jose, the current median principal and interest payment of $2,659 rose to $7,039 for prospective borrowers in September.

As mortgage rates have climbed over the course of 2026, that payment gap has widened relative to the universe of existing mortgages under 4%, illustrating how mortgage rate lock-in effects have intensified over the course of this year.

“More affordable markets offer homeowners a smaller payment jump, not an escape from higher costs,” said Hannah Jones, a senior economist at Realtor.com also quoted in the report.

The impact of lock-in effects on housing activity has been compounding since the Federal Reserve first hiked interest rates aggressively in mid-2022.

Research published in early September by Cotality, for example, found that the typical borrower from 2023 — when 30-year rates began the year at about 6.1% before peaking around 7.8% in October — was spending roughly $911 more on their monthly payment than those who took out loans in 2020 or 2021.

But even at 6% rates, noted Hale, typical monthly payments would still be more than 60% higher than the current median payment level. And that’s not accounting for rising ancillary costs of homeownership such as property insurance premiums, taxes, utilities and maintenance costs.

Those expenses have surged for homeowners in recent years, causing flexible monthly housing costs to rise precipitously alongside higher principal and interest payments. Home insurance accounted for almost 10% of the typical monthly mortgage payment at the end of the second quarter, according to ICE.