Subject-To Deal Calculator
Analyze a Subject-To (Sub-To) real estate deal — you take title and pay the seller's existing mortgage. Lower acquisition cost than traditional financing, but the loan stays in seller's name with due-on-sale risk.
What Is a Subject-To Deal?
Subject-To (or Sub-To) means buying property subject to the existing mortgage. The loan stays in the seller's name; you take title and make payments. Common with motivated sellers (divorce, relocation, low equity) who can't sell traditionally. You skip new loan qualification but inherit the loan terms — interest rate, balance, term.
The Due-on-Sale Risk
Almost every conventional mortgage has a due-on-sale clause: lender can call the loan due if title transfers. In practice, lenders rarely call performing loans (you keep paying on time). But the risk is real — major rate shifts, lender audits, insurance changes can trigger discovery. Always have an exit strategy: cash refinance reserves, hard-money backstop, or willing private lender.
When Sub-To Beats Traditional Financing
Sub-To wins when: (1) existing rate is well below market (2024-2025 deals had 3-4% loans vs 7% market), (2) seller has zero equity or negative equity, (3) seller needs quick relief from payments, (4) you lack down payment or credit for conventional financing. The math: low-rate inherited loan = $500-1500/month savings vs new loan on same balance.
Documentation You Need
(1) Recorded warranty deed transferring title. (2) Authorization to communicate with lender. (3) Mortgage payoff statement at closing. (4) Insurance policy in your name (with named additional insured for lender). (5) Land trust or LLC for asset protection. (6) Sub-To-specific purchase contract clauses. Don't attempt without an experienced real estate attorney in your state.
Sources: BiggerPockets Sub-To community, NAR investor profile 2024. Last updated: May 2026.