West Los Angeles or the Valley? What it costs to give up a low mortgage rate

A West LA condo at 3.1% or a bigger house in the Valley: the real payment, Prop 13, fire insurance, the 405, and how not to become house poor.

Our condo in West LA has a 3.1% mortgage. All in, with the HOA, it costs about $6,000 a month. Our family is growing, and the homes with the room we need, at a price that works, are in the Valley: Sherman Oaks, Encino, Tarzana, Woodland Hills. People call a rate like mine golden handcuffs. It’s so good that leaving it hurts. In California there’s a second pair: a property tax bill based on what you paid, which starts over when you buy again.

Financially, moving isn’t the wisest decision. I’d pay a lot more interest for a bigger home. But family needs change the equation. Here’s how I’m pricing the move, so you can price yours.

Start with the rate itself. The same $1.2 million loan costs $5,124 a month in principal and interest at 3.1%, and $8,309 at 7.40%, the national average in early October. That’s $3,185 more a month, just for the rate.

1. Price the new payment

Say the house costs $1.5 million, about the median for homes sold in Sherman Oaks this summer. Across the whole Valley, the median single-family home sold for $1,101,000 in September, so run the math on the price you’d really pay. Put 20% down and you borrow $1.2 million. At 7.40%, $88,423 of the first year’s payments go to interest. At 3.1%, it would be $36,852. Add property tax, and the house costs about $9,800 a month. That’s about $3,800 more than our condo’s $6,000 all in, and the house’s insurance and upkeep come on top.

2. Add what it costs to move

Selling comes out of your equity. In a 2026 survey, agents’ fees in Los Angeles averaged about 5% of the price when the seller also pays the buyer’s agent, and sellers here usually pay the city and county transfer taxes, another 0.56%. On a condo that sells for $1 million, say, that’s about $55,900. Buying costs 2% to 5% of the price, or $30,000 to $75,000 on a $1.5 million house. Then the movers.

3. Count what changes with the house

Property tax starts over. Under Prop 13, your home’s taxable value is based on what you paid and can rise at most 2% a year. Buy again and it resets to the new price. In the City of LA, the tax comes to about 1.2% of that value a year, or about $1,500 a month on $1.5 million.

Insurance is yours now. A condo’s HOA usually insures the building; in a house, you insure it yourself. Parts of the hillsides in all four neighborhoods are Very High fire hazard zones on CAL FIRE’s 2025 map, and some big insurers stopped taking new homeowners. State Farm only filed to start again last month. Get a quote before you make an offer.

So is the rest: no HOA, but the roof, the yard and the cooling are on you. In Woodland Hills, the average August high is 97.4°F. At UCLA, it’s 78.8°F. And in my experience, the Valley has a lot more mosquitoes. I think it’s one reason people hesitate to move there. This year, mosquitoes carrying West Nile virus turned up in all four neighborhoods, and on the Westside too.

4. Put a number on the 405

I have no commute now. From the Valley, it could be up to an hour each way. At an hour each way, over about 230 workdays, that’s 460 hours a year, more than eleven 40-hour weeks. Driving costs money too. The IRS’s business rate, based on what it costs to own and run a car, is 76 cents a mile. At 18 miles each way, about Woodland Hills to Westwood, that’s about $6,300 a year, less if you’d own the car anyway. Metro picked an underground rail line through the Sepulveda Pass in January 2026, from Van Nuys to the Expo Line. Its fact sheet puts that trip at about 20 minutes by train, against 40 to 80 by car. It’s years from opening, so plan on driving.

5. Look at the options in between

Keep the condo and rent it out. Your 3.1% loan keeps working, and California HOAs can’t ban rentals longer than 30 days, though some cap how many units can be rented. But you become a landlord, the rent has to cover the condo’s costs, and the down payment for the house has to come from somewhere else. Qualifying gets harder too: under Fannie Mae’s new rules, required for loan applications from Dec. 1, lenders count only 75% of the condo’s market rent, and new landlords need six months of its payments in savings.

Or rent out the condo and rent in the Valley for a year. That tests the commute, the heat and the neighborhood before you buy.

6. Then decide what the room is worth

On monthly cost alone, staying usually wins. But you’re not deciding on money alone. Take the monthly difference, about $3,800 in our example before the house’s insurance, upkeep and the commute, and ask two questions. Is the space worth that to your family? Is there a cheaper way to get it? If the answers are yes and no, moving isn’t a mistake. It’s a price you chose to pay.

7. Don’t buy so much house you can’t live

I don’t want anyone to buy a home and then be unable to do anything else: no vacations, no dinners out. That’s being house poor. A lender’s yes isn’t a budget. Fannie Mae’s automated system can approve total debt payments of up to 50% of your income before taxes. Freddie Mac suggests keeping your mortgage payment, including property tax and any mortgage insurance, under 30% of your income before taxes. For our example house’s $9,800 a month, that means earning about $392,000 a year.

Before you buy, write out a month in the new house, with your savings, a vacation fund and nights out in it. If they don’t fit, borrow less. At 7.40%, every $100,000 you don’t borrow saves about $692 a month.

And keep the basics going: no credit card debt and an emergency fund come first, as what to do with extra money after paying your bills explains.

Staying vs. moving, side by side

	Stay in the condo	Move to the Valley
Every month	$6,000, all in	About $9,800, plus insurance and upkeep
To move	Nothing	About $86,000 to $131,000 in our example, plus movers
Room	Tight for a growing family	Room to grow, and a yard
Commute	None	Up to an hour each way
Summer	78.8°F average August high (UCLA)	97.4°F (Woodland Hills); more mosquitoes, in my experience
Upkeep	The HOA handles the building	The roof, yard and insurance are yours
Rate	Keep 3.1%	7.40% average in early October

No row decides it alone. Mark the ones that matter most to your family.

What would you do?

If you were in our shoes, which would you pick?

What to do today

Write down what your home costs a month, all in, plus your loan balance and rate.
Pick three homes you’d really buy. Price each at today’s rate, with property tax and an insurance quote, and check each address on CAL FIRE’s fire hazard map.
Price the options in between: what your home would rent for, and what renting in the new area costs.

More detail

Can I take my low rate with me?

No. A U.S. mortgage is tied to the home that secures it. It can’t move to a new home, and it’s usually paid off when you sell. If your loan is FHA or VA, a qualified buyer may be able to take it over, which can help you sell. Conventional fixed-rate loans generally can’t be taken over.

Should I wait for rates to fall and refinance later?

Nobody knows where rates go. The average 30-year rate was 6.30% a year ago and is 7.40% now. Refinancing also costs 3% to 6% of the loan, according to Freddie Mac. Buy only what you can afford at today’s rate.

Does a self-driving car change the commute math?

Not yet. Tesla says its Full Self-Driving (Supervised) “is intended to be used only with a fully attentive driver.” You’re still driving, just with help. A car that drives itself with no one watching would change the math, so buy on today’s commute and count that as a bonus if it comes.

Can I keep my low property tax?

Only in some cases. Under Prop 19, owners who are 55 or older or severely and permanently disabled, and victims of a wildfire or natural disaster, can move their tax base to a new home in California, within limits.

If I rent out my old home, what about taxes?

Rent is taxable income, and you can deduct expenses and depreciation. When you sell, you can usually exclude up to $250,000 of profit, or $500,000 for a married couple filing jointly, if you owned and lived in the home 2 of the last 5 years. So if you lived there at least 2 years before moving out, selling within 3 years of moving out keeps that break, though the depreciation is still taxed.

The free 10-day email course covers the basics that make a move like this easier, one day at a time.

General education, not personal advice.