An assumable mortgage allows a homebuyer to take over the seller’s home loan – and importantly, keep the original mortgage rate. Mortgage assumption can be one way for buyers to save money while interest rates are high, and it can help sellers stand apart from the competition by offering a more affordable home loan.

If this sounds too good to be true, there is a catch: The loan amount on the assumed mortgage typically won’t cover the agreed-upon purchase price, which means the buyer may have to make up the difference in cash. Plus, only certain types of government-backed loans are assumable, and it may be difficult to find a seller who is willing to take on the additional risk of transferring their mortgage while closing the sale. All things considered, mortgage assumption is relatively uncommon, but not impossible.

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