Assumable Mortgage Savings Calculator
Assumable mortgages let a buyer take over the seller's existing loan, locking in the original (often lower) interest rate. FHA, VA, and USDA loans are assumable; most conventional mortgages are not. The savings vs new mortgage at current rates can exceed $200,000.
Which Mortgages Are Assumable
FHA loans: assumable with lender approval and buyer qualification (after 1989 closings). VA loans: assumable but seller may remain on hook unless lender releases. USDA loans: assumable with USDA approval. Conventional fixed-rate mortgages: usually NOT assumable due to due-on-sale clause. Conventional ARMs: often assumable during fixed-rate period.
The Bridge Cash Problem
Sellers usually have appreciation above loan balance. Buyer needs cash to cover the gap. Example: $400K home with $200K loan balance + $30K down payment = $170K bridge cash needed. Some buyers use second mortgage, home equity line, or seller financing to bridge. Often kills assumption deals.
VA Loan Assumption Trap
VA assumption can lock the seller into VA entitlement until the buyer pays off the loan or refinances. Means the seller cannot use full VA benefit for next home until the assumed loan is gone — often years. Veterans should require a release of liability from VA before allowing assumption.
Source: FHA Handbook 4000.1, VA Lender Handbook M26-7, USDA Rural Development Manual. Last updated: May 2026.