As Mortgage Rates Soar, More Homebuyers Assume Sellers' Low-Rate Loans

Mortgage rates are soaring, causing more buyers to take over sellers' existing low-rate mortgages to avoid current high rates. This is gaining steam as rates hit 20-year highs.

Assumable mortgages allow buyers to take over sellers' existing terms, including lower interest rates. This was common in the 1970s-80s and is returning now.

Assumptions are available for some government-backed loans (VA, USDA, FHA) which make up 22% of mortgages. Some realtors now push them as affordability drops.

For some buyers, assumptions are the only way to achieve homeownership. But sometimes the numbers don't work out.

Sellers allowing assumptions on VA loans may lose ability to get a VA loan themselves in the future. This is a risk some take, while others don't.