Moving But Keeping Your Current Home? Here’s How It Affects Your Mortgage
A lot of homeowners right now are sitting on something valuable: a historically low interest rate.
Selling feels painful. But life keeps moving — growing families, job changes, new opportunities, or simply needing more space.
So the real question becomes:
Can you move and keep your current home as a rental?
In many cases, yes. But it needs to be done strategically — because keeping that mortgage changes how you qualify for the next one.
Let’s break it down.
Usually, yes.
Your mortgage doesn’t automatically change just because you move out. What matters most is what you agreed to when you bought the home — specifically the occupancy requirement.
Most primary-residence loans are based on intent to occupy, meaning you moved in planning for it to be your primary home.
You’ll often hear “12 months” mentioned as a benchmark. That’s a common guideline lenders look for, but it’s not a hard rule written into every program. Life events — job relocation, family changes, unforeseen circumstances — can justify a move sooner.
For example:
The key is that you purchased the home legitimately as a primary residence. Converting it later can often be done — but the timing and documentation matter.
This is where the math matters.
When applying for your next mortgage, lenders must account for your current housing payment, including:
That full payment is included in your debt-to-income ratio — unless we can offset it with properly documented rental income.
And this is where structure becomes critical.
Rental income can reduce the impact of your current mortgage on qualification — but it must be documented properly and underwritten correctly.
A verbal agreement won’t work.
To use rental income, lenders typically require:
For newly executed leases, this often means showing:
For existing leases, lenders may require two months of consecutive bank statements showing rental deposits.
Most conventional guidelines use 75% of gross rental income listed on the lease. The remaining 25% accounts for vacancy and maintenance.
Example:
If your lease shows $3,000 per month:
75% × $3,000 = $2,250 qualifying rental income
Here’s where we clarify something important.
Underwriting does not literally subtract rent from your mortgage payment. Instead, the lender calculates net rental income and incorporates it into the debt-to-income formula.
In many cases, the practical effect feels similar to “offsetting” the payment — but technically, the existing mortgage remains a liability, and the rental income is added to your qualifying income (after vacancy adjustment).
Using the same example:
That $2,250 is applied in the income calculation, which can significantly reduce the overall debt-to-income impact — even though the mortgage itself is still counted.
The result can dramatically improve qualification for your next home.
Guidelines vary by loan type.
Some scenarios may require:
This is why planning the timing of your lease — before you apply for the next mortgage — matters.
Keeping your home does not automatically mean you need 20% down.
Depending on your situation, options may include:
The right structure depends on your debt-to-income ratio, credit profile, reserves, and long-term goals.
If your home becomes a rental:
These details are small individually but important in the overall financial picture.
This strategy often works well when:
It may not make sense if:
This isn’t emotional — it’s math.
Yes, you can move and keep your home.
But the question isn’t just whether it’s allowed.
It’s whether it works financially — and whether it’s structured correctly.
Before listing your home or signing a lease, run the numbers. Documentation matters. Timing matters. Program guidelines matter.
When done intentionally, keeping your home can build long-term wealth.
When done casually, it can create unnecessary strain.
Clarity always wins.
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