What People Keep Asking Us About Locked-In Mortgages – 9 Quick Answers

The $4.5 trillion mortgage lock-in crisis is no longer just an abstract number. It's a daily reality for lenders, borrowers, and credit unions across the U.S. At Takara, we talk to institutions and homeowners every day - and certain questions come up repeatedly.

So, we’ve put together a quickfire guide with 9 of the most common questions - and short, clear answers.

1. What exactly is a "locked-in mortgage"?

It's a mortgage with an interest rate so low that refinancing or moving would mean giving up a great deal - so people just… stay put.

2. Why is this a problem now?

Millions of borrowers are frozen in place. That means fewer home sales, less lending activity, and billions in trapped capital.

3. Who is affected most?

Both sides of the equation:

• Borrowers who want to move, downsize, or refinance but can’t.

• Lenders are stuck with low-yield loans and suppressed origination volume.

4. What is the size of this problem?

Approximately $4.5 trillion in mortgage capital is estimated to be locked into sub-4% loans on Bank and Credit Union balance sheets in the U.S.

5. Can’t people just refinance or wait it out?

Not really. Refinancing doesn’t make sense if your current rate is half the market rate. And “waiting it out” can take years - if not a decade.

6. Isn’t this just the new normal?

It doesn’t have to be. Other countries, like Denmark, have shown that smart payoff models can reintroduce flexibility into the market.

7. What is a “market value payoff” solution?

It’s a way for borrowers to exit their mortgage early at a discount that reflects current interest rates - while lenders recover capital more efficiently.

8. How does Takara help with this?

We offer turnkey solutions for institutions:

• Analyze portfolio value.

• Offer a first-of-its-kind borrower benefit - a 15% discount for eligible borrowers - designed to boost loyalty and deepen customer relationships.

• Provide the legal, regulatory, and financial infrastructure.

9. How fast can we implement this?

Partners can be ready to execute in a few as 6 weeks with limited effort. It's actually quite simple.

💡 Let’s unlock the future of mortgage flexibility - together.