There's money on the table. Basically a 3% mortgage is worth maybe 90% of what is due. When you sell, you basically give them back $100 and the lender is very h

There's money on the table. Basically a 3% mortgage is worth maybe 90% of what is due. When you sell, you basically give them back $100 and the lender is very happy (they just made $10!). The reverse is true when rates have historically been higher. Prepayments are path dependent. So now you essentially have this $10 surplus by not trading in your loan worth 90%. How the buyer and seller split that is up to them. For instance the buyer could say I want an extra $10 on top of what you would have paid without the transfer or the reverse. But realistically the buyer would pay a little more for a net lower payment. Win-win. It's very clever. The big downside is having to get a second lien to cover the remaining amount which would likely be higher rate because it'll be a second lien. And the hassle of having two mortgages.