What is an assumable mortgage?
When you assume a mortgage, you take over the seller's existing loan — including their interest rate, remaining balance, and terms. If they locked in a 2.5% rate in 2021 and today's rates are 7%+, you inherit that 2.5% rate.
This is built into FHA, VA, and USDA government-backed loans. The lender's servicer must approve you, but the rate and terms transfer exactly as they are.
Why it's worth it
Same home. Same cash. Different rate.
You're buying a $500,000 home with $100,000 to put down.
Traditional Mortgage
Assumed Mortgage
$764 saved every month
$388,900 less interest · Paid off 5 years sooner
Based on a $500,000 home, $100,000 down. Traditional: 30-year fixed at 7%. Assumed: 25 years remaining at 3%. Example only.
Your $100,000 works the same either way — as a down payment or to cover the equity gap. The difference is the rate you pay on the rest.
How It Works
01
Browse Listings
Find homes with assumable loans on Passage. Every listing shows the rate, balance, and equity gap upfront.
02
Run the Numbers
Use our equity calculator to see your monthly savings and what you’d need for a down payment.
03
Connect with the Agent
Submit your interest. The listing agent walks you through the offer and servicer application.
04
Close at the Seller’s Rate
The servicer approves the transfer. You close on the home and inherit the original loan terms. Typical timeline: 30–60 days.
Calling the Servicer
Most assumable deals stall at the bank — not because the loan isn't eligible, but because the servicer's front-line staff aren't familiar with the process.
These scripts frame the conversation as a statement backed by federal law, not an open-ended question. Select your loan type and copy the script before calling.
Ask for the Loan Assumption Department by name
Cite the specific federal regulation for your loan type
If denied, escalate with the legal reference — it works
Understanding the equity gap
The equity gap is the difference between the home's price and the remaining loan balance. It's the amount you need to bring to the deal.
Home Price: $500,000
Cash / Down Payment
Cover part or all of the gap with savings or proceeds from selling your current home.
Second Mortgage
A smaller second loan at current rates. Your blended payment is still typically lower than a single new mortgage.
Seller Financing
Some sellers carry a note for part of the gap. Terms are negotiated directly between buyer and seller.
Every listing on Passage shows the equity gap upfront, and our calculator lets you model different down payment scenarios.
Eligible Loan Types
Only government-backed loans are assumable. Here's what to know about each.
FHA Loans
Most Common- •Creditworthiness review required by servicer
- •Processing fee up to $1,800
- •No veteran status needed — anyone can assume
24 CFR § 203.258 · HUD Handbook 4000.1
VA Loans
Veterans & Civilians- •Open to both veterans and non-veterans
- •0.5% funding fee on loan balance
- •Fee waived for disabled veterans & surviving spouses
- •Non-veteran buyer: seller’s VA entitlement stays tied to loan
38 USC § 3714 · 38 CFR § 36.4313
USDA Loans
Rural Areas- •Property must be in a USDA-eligible area
- •Buyer must meet income limits (115% of area median)
- •Approval required from USDA Rural Development
USDA Rural Development guidelines
Savings Illustration
Based on a $450,000 loan balance.
Without Assumption (7.5%)
~$3,147
/month
With Assumption (3.0%)
~$1,897
/month
~$1,250 saved every month
~$15,000/year in savings
Example only. Actual savings depend on loan balance, rate, and terms.
