Sherin Shibu

In 2026, most homebuyers are staring down mortgage rates roughly twice as high as the pandemic lows, but a little-known mechanism called an assumable mortgage offers a way to capture sub‑3% or sub‑5% loans that were written years ago. In an assumption, the buyer takes over the seller’s existing mortgage—and its low interest rate—instead of taking out a brand-new loan at today’s higher rates. The buyer gets a cheaper monthly payment, the seller gains a powerful marketing hook that can attract more offers or a better price, and overall housing turnover ticks up slightly in an otherwise frozen market.​

Assumable loans are surprisingly widespread but badly underused. Assume List, a startup that helps match buyers with these deals, estimates that about 6 million homes in the U.S. have both an assumable mortgage and an interest rate below 5%. The key is that most conventional mortgages are not assumable; the opportunity primarily lies in government-backed loans such as VA and FHA mortgages, which made up about 18% of new originations in 2020. Many of those borrowers—and their agents—don’t realize the feature exists, so listings rarely advertise it. That knowledge gap has spawned new companies like Assume Loans, Assumption Solutions, and Roam, which run search tools to identify assumable loans and guide consumers through the process. Roam, for example, used AI to scan listings in Houston and found 433 properties with assumable mortgages at 3% or lower, compared with just three showing up as assumable on Zillow, which depends on sellers to self-report.​

Even when the option exists, the process can be slow and frustrating. By law, mortgage servicers have 45 days to review a buyer’s credit and decide whether to approve the assumption, but in practice the timeline can stretch into months. That’s partly because servicers have little financial incentive to cooperate; the FHA allows them to charge assumption fees up to about $1,800, but they stand to earn far more interest by replacing a 2.5% loan with a new 6–7% loan. Companies like Assumption Solutions say they earn their fees by hounding servicers to meet deadlines and keep files moving. One Florida buyer, Brendan Burroughs, describes being told he was behind 1,500 other customers and getting radio silence for weeks until he hired an assumption-focused firm, after which his case was suddenly processed within days.​

The biggest structural barrier is the cash gap between old mortgage balances and today’s prices. Home prices have jumped roughly 54% since January 2020, so a loan written when a house cost $500,000 may now cover only a fraction of the same home’s $700,000 value or more. Buyers have to bridge that difference, plus whatever principal the seller has already paid down, often resulting in six‑figure down payments. Secondary “gap” loans are possible but hard to secure at reasonable rates, so many buyers must use cash. Housing-policy expert Laurie Goodman notes this makes assumable mortgages a poor fit for the very group policymakers say they want to help: first-time buyers and young families, who are “the last people” likely to have an extra $200,000 lying around. Burroughs was an exception—he pulled together a $105,000 down payment from early Tesla and Nvidia investments and ended up with a mortgage payment roughly half what a co-worker pays for a similar home.​

Advocates see assumable and “portable” mortgages as one way to chip away at the current housing gridlock, in which owners with ultra-low pandemic-era rates won’t move because trading up would mean doubling their interest rate. A report from the Groundwork Collaborative argues that making more conventional mortgages assumable and allowing borrowers to carry their existing loans to new homes could increase inventory and mobility while the country struggles to add enough new housing supply. Federal Home Financing Agency officials have signaled that Fannie Mae and Freddie Mac are exploring such ideas. Skeptics like Goodman counter that, in practice, these tools mostly benefit cash-rich buyers and may even push up prices for homes attached to particularly attractive low-rate loans.

On the ground, the market remains niche but intense. Minneapolis agent Charles Johnson used an assumable mortgage to get a duplex under 3% but says he rarely pitches the idea to clients because “it’d be like a bait and switch”—the pool of qualifying homes is too small and the process too demanding for most buyers. Michael Lorino, founder of Assume List, disagrees on the demand side, saying he has personally helped on dozens of assumptions and hundreds more as an advisor. “Ask any homebuyer if they want to save money,” he says; in his view, the appetite is enormous, but the combination of lender resistance, long timelines, and steep cash requirements keeps assumable mortgages a powerful but limited workaround rather than a mass-market solution.