Which class of mortgage holder are you? Only 20% are in the elite pre-2022 camp

This milestone, identified by Realtor.com’s senior economic research analyst Hannah Jones on Jan. 14, marks a significant inflection point in the housing recovery. It raises a pressing financial question for every homeowner: Which class of mortgage holder are you?

The elite class: The sub-3% holders (20%)

Once the dominant narrative of the post-pandemic market, the group of homeowners clinging to rates below 3% is shrinking. As of the third quarter of 2025, only 20% of outstanding mortgages fell into this coveted category.

Membership in this club is exclusive to those who bought or refinanced during a specific historic window. Freddie Mac fixed rates for 30-year loans generally stayed below the 3% threshold only between July 2020 and September 2021—the only period in history dating back to 1971 when borrowing was that cheap. For these homeowners, the financial incentive to stay put is powerful; trading a sub-3% rate for today’s market rate would increase the monthly payment on a median-price home by nearly $1,000.

The ‘golden handcuff’ majority: 3% to 5% (48.6%)

While they may not be in the elite tier, nearly half of American mortgage holders are still sitting comfortably with rates between 3% and 5%. The largest single bracket of homeowners—31.5%—holds mortgages with rates between 3% and 4%. Another 17.1% sit between 4% and 5%.

Combined with the sub-3% group, roughly 69% of all outstanding mortgages still carry a rate of 5% or lower. This massive block of consumers represents the “lock-in” effect that has strangled housing inventory for years, as these owners refuse to sell their assets only to borrow at much higher costs.

The new reality class: 6%-plus (21.2%)

The fastest-growing demographic is the high-rate borrower. According to the data, 21.2% of mortgages now carry an interest rate of 6% or higher. This group has officially overtaken the sub-3% class in size, a shift driven by “swappers”—borrowers exchanging low-rate mortgages for higher-rate ones—and new entrants joining the market.

Despite rates hovering above 6% since September 2022, life goes on. The rise of this class is driven by “big life events” such as marriage, children, or divorce, which force homeowners to move regardless of the rate environment. Additionally, some buyers who delayed purchases in hopes of a return to ultra-low rates have capitulated, accepting the current rates in the low-6% range as the new normal.

The outlook

The caste system that has emerged in America’s housing market will eventually be a thing of the past, as mortgage rates show the housing market slowly normalizing. Supply has improved enough to tip the national market into “balanced” territory, with some local areas even becoming buyer’s markets. As 2026 progresses, the “elite” class will likely continue to shrink as mortgages are paid off or homeowners succumb to the need to move.

Projections suggest by the time fourth-quarter 2025 data is fully analyzed, the share of mortgages under 6% will drop closer to 75%. While the “lock-in” effect remains a hurdle, the market is beginning to move again, driven by a growing class of homeowners who are finally accepting the price of admission in the post-pandemic economy.

For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.