# Assumable mortgage

> An assumable mortgage is one a buyer can take over from the seller, keeping its rate and balance. Which loans qualify, the approval step and the cash gap.

URL: https://mail.mortgage-math-us.com/glossary/assumable-mortgage/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**An assumable mortgage** is a home loan that a buyer can take over from the seller — keeping its interest rate, remaining balance and remaining term — instead of getting a new loan. The lender or servicer generally must approve the buyer first.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| VA funding fee on an assumption | 0.5% | [U.S. Department of Veterans Affairs: VA funding fee and loan closing costs](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/) | Apr 7, 2023 |
| 30-year fixed average (for comparison) | 7.24% | [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) | Week of Oct 29, 2026 |

## Which loans can be assumed

FHA-insured mortgages are assumable, and for loans made since late 1989 the buyer must pass a credit review. VA loans can be assumed with approval, and the buyer pays a [VA funding fee](https://mail.mortgage-math-us.com/glossary/va-funding-fee/) of 0.5% — $1,250 on a $250,000 balance. Unless the buyer is an eligible veteran who substitutes their own [entitlement](https://mail.mortgage-math-us.com/glossary/va-entitlement/), the seller’s entitlement stays tied up in the loan. Most conventional fixed-rate loans contain a [due-on-sale clause](https://mail.mortgage-math-us.com/glossary/due-on-sale-clause/) and can’t be assumed.

## The cash gap

The buyer takes over the balance, not the price. On a $400,000 home with $250,000 left on a loan at an example 3.5% with 25 years to go, the payment is $1,252 — versus $1,704 for a new 30-year loan of the same size at 7.24%. But the buyer must cover the seller’s $150,000 of equity with cash or a second loan.

Sellers should get a written release of liability; without one, they can stay responsible if the buyer defaults. The [VA loans guide](https://mail.mortgage-math-us.com/loan-types/va-loans/) and [FHA loans guide](https://mail.mortgage-math-us.com/loan-types/fha-loans/) cover each program.

## Sources

- [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- [U.S. Department of Veterans Affairs: VA funding fee and loan closing costs](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/) — VA funding fee on a loan assumption (Apr 7, 2023)
- [HUD Handbook 4155.1, Chapter 7: Assumptions](https://www.hud.gov/sites/documents/4155-1_7.pdf)
- [VA Form 26-6381: Application for assumption approval and/or release from personal liability](https://www.va.gov/forms/26-6381/)

_General information, not financial advice._