Assuming a seller's 3% loan in a 7% market sounds like the best housing hack of the decade — and sometimes it is. But the catch is the equity gap: on a home that has gained value, the seller's low-balance loan plus your down payment rarely covers the price, and the second loan you need to bridge the difference quietly raises your real, blended rate. This calculator runs the honest math so you can see when assuming actually wins.

Why the equity gap changes everything

An assumable mortgage lets a qualified buyer take over the seller's existing FHA, VA, or USDA loan — same rate, same remaining term. The problem is that you're buying at today's price but assuming yesterday's loan balance. On a $450,000 home where the seller only owes $300,000, a $50,000 down payment still leaves a $100,000 gap.

That gap has to be covered somehow. Cash closes it entirely (and keeps your rate at the low assumed number). More often it's financed with a second mortgage or HELOC at current rates — and that second loan is what dilutes your savings.

How the blended rate works

The balance-weighted note rate describes the starting financing mix, not its total cost. Equal $250,000 balances at 3% and 11% blend to 7%, but different maturities change monthly cash flow and lifetime interest. Compare separate schedules, quoted upfront costs and cash paid plus remaining debt at the same exit horizon. Ongoing MIP and new-loan closing costs are not included in this tool.

VA and FHA specifics that matter

VA loans: a 0.5% funding fee on the assumed balance plus a small servicer processing fee (up to $300) apply at closing. Critically, the seller's VA entitlement stays tied up in the loan unless the buyer is VA-eligible and substitutes their own entitlement — which can block the seller's next VA purchase. Both parties should confirm this before closing.

FHA loans: all FHA loans are assumable, the buyer must credit-qualify and occupy the home, and the mortgage insurance premium (MIP) carries over — often for the life of the loan. The servicer's processing fee is capped by HUD at roughly $1,800.

This calculator is a planning estimate. Assumption approval, exact fees, and second-loan terms are lender- and agency-specific, so confirm the numbers with the servicer and a housing professional before you rely on them.