Last updated: November 2025
Quick Answer
Lower mortgage rates in 2026 have made it more affordable for homeowners to move from their starter homes to larger, long-term properties.
With lower monthly payments and higher equity gains from recent home appreciation, upsizing now may align with your financial goals—especially if you’re ready to lock in a stable rate on your forever home.
Find out what your current equity could buy—talk to a GO Mortgage advisor.
Why homeowners are thinking about a trade-up home strategy
As mortgage rates decline and equity builds in existing homes, many homeowners are reevaluating whether it’s time to move up. If your starter home no longer fits your family’s needs or lifestyle, a larger home may finally be within reach.
The recent drop in rates means:
- Lower monthly mortgage payments on higher-priced homes
- Improved loan qualification power due to lower debt-to-income ratios
- More competitive purchase prices in certain markets
- Greater leverage from built-up home equity
This convergence of financial factors has made upsizing a timely and practical consideration for homeowners looking to make their next move.
What does it mean to upsize your home?
Upsizing your home typically refers to moving from a smaller, entry-level property to a larger one, often with more bedrooms, square footage, or amenities. It’s commonly motivated by changes in life circumstances:
- Growing families
- Need for a home office
- Desire for a better school district
- Long-term comfort or aging-in-place planning
- Increased household income or job stability
In contrast to a “sideways” move or downsizing, upsizing involves taking on a larger mortgage. But that cost can be softened by today’s improved lending environment.
How lower rates boost affordability for move-up mortgages
Mortgage rates directly impact how much home you can afford. When rates fall, your monthly payment drops for the same loan amount. Or, you can qualify for a larger mortgage without raising your budget.
Example:
| Home Price | Rate | Loan Amount | Monthly Payment (P&I) |
|---|---|---|---|
| $500,000 | 7.25% | $450,000 | ~$3,070 |
| $500,000 | 5.75% | $450,000 | ~$2,625 |
That $445 per month savings makes a bigger home more manageable. If your current home has appreciated significantly, your equity may also serve as a down payment. This can further reduce the amount you need to borrow.
Using your current home equity to upsize
If you’ve owned your starter home for several years, it’s likely gained value. That equity can be used toward your next home as:
- A down payment to reduce your new loan size
- Closing cost coverage to reduce out-of-pocket expenses
- Bridge funding between selling and buying
Many move-up buyers sell their current home and use the proceeds to upgrade. In some cases, a bridge loan or HELOC can be used temporarily to access equity before the sale closes.
Should you buy before you sell or sell before you buy?
One of the biggest challenges in upsizing is timing. Should you list your current home first or find your next one?
Sell first:
- Less financial risk
- Know your exact equity
- Easier mortgage qualification
Buy first:
- Avoid temporary housing
- More control over the moving timeline
- Riskier without strong financing or a bridge solution
Some buyers negotiate contingent offers, meaning their purchase depends on selling their home. Others use short-term financing to close on the new property first. Preapproval and planning are essential either way.
Loan considerations when upsizing
Buying a bigger home comes with financing decisions. Lower rates help, but affordability still depends on the full loan picture:
- Preapproval: Confirm how much house you can afford at today’s rates
- Loan term: Choose between 15-, 20-, or 30-year options
- Fixed vs. adjustable: Fixed-rate loans offer predictability; ARMs may lower payments early
- Down payment: Using equity can help you avoid mortgage insurance
- DTI ratio: Lenders want your debt-to-income ratio under 43% for most conventional loans
Getting preapproved early helps you make competitive offers and act quickly in a competitive market.
Pros and cons of upsizing in a low-rate market
| Pros | Cons |
|---|---|
| Lower monthly payment for a larger home | Higher property taxes and maintenance |
| Stronger loan qualification | Larger down payment needed |
| Leverage existing home equity | Transition timing can be complex |
| Opportunity to lock long-term savings | Risk of buying high in a competitive area |
| Better fit for long-term needs | Bigger loan means more total interest |
Weigh these factors against your lifestyle and financial goals to determine whether now is the right time to make your move.
How to afford bigger home in 2026
If your starter home no longer suits your needs, now may be the ideal time to move up. Lower mortgage rates, higher equity, and improved loan options have created a window of opportunity for buyers ready to upgrade.
Before making the move:
- Get preapproved to understand your financing range
- Evaluate the total cost of ownership, not just the loan
- Time your buy/sell process carefully to avoid overlap
- Consider your long-term goals, not just short-term trends
Your next home should support how you live today and how you will live tomorrow.
Ready to explore your options?
Apply with GO Mortgage to compare move-up financing solutions and see how lower rates can make your forever home a reality.
FAQ: Upsize your home with lower rates
A: A lower rate improves affordability, but lenders still assess income, DTI, and down payment. You may qualify for more, but ensure the payment fits your budget.
A: Yes. Once you sell, your equity can be used for your next home. Some lenders also offer bridge loans to access equity before your current sale closes.
A: Taking on a larger mortgage that stretches your budget too thin. Also, home maintenance, utilities, and property taxes all rise with home size.
A: If your current home still fits your needs, refinancing may make more sense. But if you’ve outgrown the space, low rates make upsizing more feasible.
A: You can refinance later to capture additional savings—but locking in a favorable fixed rate now protects you from future increases.