Assumable Mortgage Calculator
An assumable mortgage lets you take over a seller's low-rate loan. Enter the price, the seller's balance, rate and remaining term, and how you'll cover the equity gap to see your monthly payment, blended rate, cash needed and how much you'd save compared with a new mortgage at today's rate.
Assumable mortgage calculator
How an assumable mortgage works
When you assume a mortgage, you take over the seller's loan at its existing rate and remaining term, with the lender's approval. If the seller locked in 3% and today's rates are 6–7%, that can save hundreds of dollars a month.
- Which loans are assumable: FHA, VA and USDA loans generally are, if the buyer qualifies with the lender. Most conventional loans have a due-on-sale clause that stops assumption.
- The equity gap: you pay the seller the difference between the price and the loan balance, in cash or with a second loan. That's usually the hardest part, and the second loan's higher rate raises your blended rate (the calculator works out the single rate that matches your combined payments).
- VA loans: a non-veteran can assume a VA loan, but the seller's VA entitlement stays tied to it until it's paid off. A VA funding fee of 0.5% of the balance generally applies to assumptions.
- Timeline: assumptions often take longer than a new loan to close. Ask the servicer early how long theirs take and what they charge.
Common questions
What is an assumable mortgage?
A home loan a buyer can take over from the seller, keeping the original rate, balance and remaining term, with the lender's approval.
Are FHA loans assumable?
Yes, FHA loans can generally be assumed by a buyer who meets the lender's credit and income requirements. VA and USDA loans can be too.
How do I pay the equity gap on an assumable mortgage?
With cash, a second mortgage or HELOC, or seller financing. A second loan raises your blended rate, so compare the total payment with a new mortgage.
Is an assumable mortgage worth it?
Usually when the existing rate is well below today's rates and the equity gap is manageable. The calculator compares both options.
Does the seller stay liable after an assumption?
Not if the lender approves a release of liability. With a VA loan, the seller's entitlement stays tied up unless the buyer is a veteran who substitutes their own.
Sources
- Consumer Financial Protection Bureau: What is an assumable mortgage?
- U.S. Department of Veterans Affairs: VA funding fee and loan closing costs
- HUD: FHA single family housing policy handbook 4000.1 (assumptions)
Related
General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.