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
0.5%
VA funding fee on an assumption
U.S. Department of Veterans Affairs: VA funding fee and loan closing costs · Apr 7, 2023
7.24%
30-year fixed average (for comparison)
Freddie Mac Primary Mortgage Market Survey · 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 of 0.5% — $1,250 on a $250,000 balance. Unless the buyer is an eligible veteran who substitutes their own entitlement, the seller’s entitlement stays tied up in the loan. Most conventional fixed-rate loans contain a 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 and FHA loans guide cover each program.
Sources
- Freddie Mac Primary Mortgage Market Survey — 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 — VA funding fee on a loan assumption (Apr 7, 2023)
- HUD Handbook 4155.1, Chapter 7: Assumptions
- VA Form 26-6381: Application for assumption approval and/or release from personal liability
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.