💡 How much would you save by assuming a seller's low rate mortgage?

Assuming an existing low-rate mortgage offers a powerful workaround to today's higher rates. A homebuyer recently shared on r/FirstTimeHomeBuyer how they secured a 2.75% rate in Lake Arrowhead, CA, by taking over a seller's loan. This calculator compares an assumable low-rate mortgage against a standard new loan to reveal your true lifetime savings.

When you assume a mortgage, you take over the exact loan balance, interest rate, and remaining term of the seller. There is a catch. You must pay the seller the difference between the purchase price and the remaining loan balance in cash.

In the Reddit story, the buyer bought a $290,000 home with a $230,000 assumable loan. They came up with $60,000 upfront to bridge the equity gap.

We compare the assumption against a standard market-rate mortgage to find your exact savings. We assume you use the same upfront cash as your down payment. This leaves you with the identical $230,000 base loan amount to finance.

A market loan typically offers a fresh 30-year term. The assumed loan will have fewer years left. The dramatically lower interest rate of an assumption usually wins easily in total costs over time.

For further related reading, check out:

• Reddit