Love it or leave it?

LOW-RATE MORTGAGES KEEP HOMEOWNERS FROM MOVING

Friendly neighbors, a garden that’s testament to your TLC, a good view of the sunset from your deck — all reasons homeowners may be reluctant to move.

But a mortgage you can’t bear to give up?

Right now many of the homeowners who bought or refinanced during the several years following the housing crisis — when rates hovered in the 3 or 4 percent range — are experiencing what housing economists are calling the “rate lock-in effect.”

These owners may be “financially imprisoned in their own home,” notes Mark Fleming, chief economist at First American Financial Corp. Owners whose income hasn’t risen much and want to move to a more expensive home that would require taking on a mortgage bigger than their current low-rate loan fall into the “imprisoned” category, notes Jin Man Lee, research director at the Institute for Housing Studies at DePaul University in Chicago.

But some may be staying put simply because they can’t abandon their low-rate loan. And that could blind them to the bigger picture. “It’s the reverse side of staying with an investment just because it pays a high income. The infatuation with either will get in the way of making a sound decision,” says Stephen Taddie, managing partner at Stellar Capital Management.

Indeed, personal finance experts say that although homeowners typically build wealth as housing prices rise and they whittle down their mortgage balance, buying a home should involve the same decision-making that goes into other consumer purchases: Does the expense fit in your budget, and does the purchase fit your needs/ wants?

An owner clinging to a 3.5 percent mortgage, but who’s paying expensive private school tuition because he doesn’t like his public school district, or who’s living in cramped quarters, should tally up the pros and cons — and costs — of moving versus staying, advises Taddie.