About the Assumable Mortgage Calculator
When you assume a mortgage you take over the seller’s existing loan — its balance, interest rate and remaining term — instead of getting a new one. FHA, VA and USDA loans are generally assumable with lender approval, and a 3% loan taken out a few years ago can be worth a lot when new loans cost far more. This calculator puts a number on that.
The catch is the equity gap: you must pay the seller the difference between the price and the loan balance, either in cash or with a second loan at today’s higher rates. Enter the price, the seller’s balance and rate, how much of the gap you will finance, and an assumption fee. The calculator compares your monthly payment and the interest plus fees over your chosen horizon against a brand-new mortgage with the same down payment.
Use it as a buyer weighing a listing that advertises an assumable loan, or as a seller showing buyers what the loan is worth. Property tax, insurance and mortgage insurance are left out because they are similar either way; note that an assumed FHA loan keeps its existing mortgage insurance.
With the default inputs, the interest + fees saved by assuming is $105,414.01. Change any value above to recalculate instantly.
How to use the assumable mortgage calculator
- 1Enter the purchase price and the seller’s remaining loan balance, rate and years left.
- 2Decide how much of the equity gap you will finance and enter that loan’s rate and term.
- 3Add the assumption fee and other costs.
- 4Enter today’s rate, term and closing costs for a new mortgage.
- 5Set how long you will keep the home and compare payments, cash and total savings.
Formula and method
The assumed loan keeps the seller’s balance, rate and remaining term, so its payment is the standard amortization payment on that balance over the months left. Any part of the equity gap you do not pay in cash is borrowed on a second loan at its own rate and term. The comparison is a new mortgage for the same total amount borrowed (price minus the same cash down payment) at today’s rate.
Because both paths start with the same total debt, the fair measure of cost is the interest paid plus upfront fees over the years you expect to keep the home. Interest is calculated month by month on the amortizing balances; any loan that is paid off within the horizon stops accruing interest. Taxes, insurance and mortgage insurance are excluded.
- gap
- Price minus the assumable loan balance
- second loan
- Amount of the gap financed with a new second mortgage
- fee
- Assumption processing fee and closing costs
Worked examples
$450k home with a 3.25% loan and $100k second
The seller owes $280,000, so the equity gap is $170,000; financing $100,000 leaves $70,000 down plus $1,800 of fees. The 3.25% loan costs $1,364.49 a month and the 8.5% second $984.74, versus $2,464.67 for a new $380,000 loan at 6.75%. Over 10 years, interest and fees total about $145,891 by assuming versus $251,305 with a new loan — about $105,414 saved.
Pay the whole gap in cash
Paying the full $170,000 gap in cash means only the $1,364.49 assumed payment. A new mortgage with the same $170,000 down would be a $280,000 loan at 6.75%, costing $1,816.07 a month; over 10 years assuming saves about $105,447 of interest and fees.
Frequently asked questions
Which mortgages are assumable?+
FHA, VA and USDA loans are generally assumable if the buyer qualifies and the lender approves. Most conventional loans have a due-on-sale clause and cannot be assumed, except in limited cases such as transfers to a spouse or after a death.
What is the equity gap on an assumable mortgage?+
It is the difference between the purchase price and the loan balance you take over. You must pay it to the seller in cash or with a second mortgage, which is often the biggest hurdle with assumptions.
How much does it cost to assume a mortgage?+
Assumption fees are usually far lower than closing costs on a new loan. FHA caps the servicer’s assumption processing fee, VA assumptions carry a 0.5% funding fee unless exempt, and you still pay title and recording costs.
Can a non-veteran assume a VA loan?+
Yes, a qualified non-veteran can assume a VA loan with lender approval. However, the seller’s VA entitlement stays tied to the loan until it is paid off, unless the buyer is a veteran who substitutes their own entitlement.
How long does a mortgage assumption take?+
Assumptions often take longer than a new loan — commonly 45 to 90 days or more — because the servicer must underwrite the buyer and process the transfer. Build that into your purchase contract timeline.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.