🏡 How much would your parents save by assuming your mortgage?

To keep this simple, we estimate the monthly principal and interest payments using a standard amortization formula. We assume the new home requires a 30-year mortgage, while the assumed mortgage continues for its remaining term. We exclude home appreciation since they own a home in either scenario.

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• sell-vs-rent-out-your-home

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• Reddit

You have a low-rate mortgage. Your parents are retiring and looking to move. Letting them assume your mortgage instead of buying a new home at today's rates could save them a fortune. Let's run the numbers.

Assuming a mortgage means taking over the existing loan terms, including that sweet 3.375% rate. If your parents qualify for property tax exemptions like 100% VA disability, their carrying costs drop even further. Best of all, they can invest their current home equity instead of sinking it into a new down payment.

If they buy a new home in a retirement community, they face today's interest rates. Even with a hefty down payment from their current home equity, the interest costs add up fast. They also lose the opportunity to invest that cash.