Assumable Mortgage Calculator

An assumption transfers the seller's loan, not the seller's price. If a home sells for $550,000 and the assumable balance is $400,000, the remaining $150,000, the equity gap, still has to come from somewhere: the buyer's cash, a second mortgage, or a mix of the two. Most honest assumption math is really gap math, which is why this calculator makes the gap a first-class input instead of a footnote.

What you get for solving the gap is the seller's rate on the largest slice of the debt. When that rate sits far below what a new loan costs, the interest saving over the first five and ten years is large, and it is front-loaded: the early years of any loan are the interest-heavy years, so the comparison windows on this page show 5 and 10 year interest, not just full-term totals across loans that end in different years.

Two cautions before the numbers seduce anyone. First, only some loans can be assumed at all: FHA, VA, and USDA loans are assumable under their program rules, most conventional loans are not, and the servicer must approve the assumption and the buyer's qualification in every case. Second, the second mortgage is a real loan with a real quote: its rate and term are your inputs here because no honest average exists, and a large gap loan at a high rate can eat the assumption's advantage.

It wins when the seller's rate is well below today's rates and the gap is modest relative to the balance: a recent purchase with a low-rate loan has a small gap and a large low-rate balance, which is the strongest case. The blended rate stays near the seller's rate, and the interest saving compounds for as long as you hold the loans.

It loses in three recurring shapes. A long-held home has a small balance and a huge gap, so most of the purchase ends up financed at today's second-mortgage rates anyway. A short remaining term on the assumed loan makes its payment large despite the low rate, which can push the stack payment above a new 30-year loan's payment. And a second mortgage quoted well above the rate you entered can flip the 5 and 10 year interest comparison; rerun this calculator with the actual quote before deciding, not after.

If the seller's rate turns out not to be assumable, or the servicer declines, the fallback levers live elsewhere on this site: a refinance changes the rate on a loan you already hold, and a recast lowers the payment on one. Neither creates an assumption, but both belong in the same comparison conversation.

The servicer holding the seller's loan runs the assumption. Expect a full qualification check on the buyer, an assumption fee, and a timeline measured in weeks to months rather than days; build that timeline into any purchase agreement. For VA loans there is an extra wrinkle worth confirming with the servicer: the seller's VA entitlement can stay tied to the loan until it is paid off or substituted, which is why some sellers require the buyer to be a VA-eligible veteran who can substitute entitlement.

Nothing on this page estimates your odds of approval, the assumption fee, or closing costs, because all three are set by the servicer and the loan program, not by any general rule. Get the servicer's answers in writing, then rerun the comparison with the real second-mortgage quote. The math here is the easy part of an assumption; the approval is the schedule risk.