As a licensed real estate agent in Kansas and Missouri since 2011, I’ve seen the housing market go through dramatic shifts, especially with interest rates. Rates skyrocketed between 2022 and 2023, peaked, stabilized, and as of January 2026, have ticked down slightly to around 5.75%-6.25% for 30-year fixed mortgages for many buyers. However, many homeowners still sit on loans from the low-rate era with rates in the 2-4% range. This creates a unique opportunity: assumable mortgages.
An assumable mortgage allows a buyer to take over the seller’s existing loan, including its lower interest rate, remaining balance, and terms. I’ve had buyer clients successfully use this strategy in the past, saving significantly on interest compared to new loans.
What Makes a Mortgage Assumable?
Not all loans qualify. The key is the loan type:
- FHA loans: Assumable with lender approval; buyers must qualify as if applying for a new FHA loan.
- VA loans: Assumable (even by non-veterans for post-1988 loans); lender approval required.
- USDA loans: Assumable, often with new terms, and subject to income/rural location eligibility.
- Conventional loans: Generally not assumable due to due-on-sale clauses (with rare exceptions for certain adjustable-rate mortgages).
Most assumable mortgages today are government-backed (FHA, VA, USDA), which were popular during the low-rate years.
The Biggest Advantage: Locking in a Below-Market Rate
For buyers, the primary benefit is securing financing at a rate far below current market levels. Many existing assumable loans carry rates from the pandemic era (sub-4%), meaning thousands in savings over the loan’s life; even if rates continue ticking down.
For sellers, an assumable mortgage is a powerful marketing tool. In a market where buyers are rate-sensitive, highlighting “Assumable low-rate mortgage available” can attract more offers and potentially justify a higher sale price.
The Real Challenges: Why They’re Not for Every Deal
While the rate savings sound ideal, assumable mortgages come with significant hurdles that make them impractical in many cases:
- Not All Loans Are Assumable As noted, most conventional loans (the majority of mortgages) aren’t eligible. You need a seller with an FHA, VA, or USDA loan.
- Processing Delays and Lender Disincentives We spent over a decade with ultra-low rates, so many lenders and servicers rarely handled mortgage assumptions. Staff aren’t always trained, processes aren’t streamlined, and timelines are unpredictable—often 60-90 days or longer. Worse, assuming a low-rate loan means the lender “cannibalizes” their higher-rate business. There’s little incentive to prioritize or expedite these. This makes assumptions tough for sellers needing a quick, predictable close to buy their next home.
- Partial Coverage and Diluted Savings The assumable portion is only the seller’s remaining balance. Home values have risen sharply since 2020-2021, so balances are often much lower than current prices. Buyers must cover the difference with cash (a large “down payment”) or a second mortgage at today’s higher rates. This blends the financing: part low-rate, part high-rate—reducing overall savings.
When Does an Assumable Mortgage Make Sense?
In my experience, they’re best for:
- Buyers with substantial cash for the equity gap.
- Non-contingent offers (or patient timelines).
- Properties where the assumable balance covers a large portion of the price.
- Sellers in no rush, using the feature to differentiate their listing.
For most transactions, the delays and partial-rate benefits make traditional financing more practical—especially as rates ease.
Final Thoughts from the Trenches
Assumable mortgages are a clever tool resurfacing in this post-rate-hike world, and I’ve seen them delight buyers who qualify. But they’re no silver bullet. The challenges being limited eligibility, slow processing, and blended rates outweighing the perks for time-sensitive or average-equity deals.
If you’re buying or selling in Kansas or Missouri, let’s talk specifics. An assumable loan could be a game-changer… or a headache. Knowing the realities upfront is key.
Justin Rollheiser – REALTOR®
Keller Williams Realty | Diamond Partners, Inc.
13671 S Mur-Len Rd | Olathe, KS 66062
Mobile 913-800-7653
Office 913-322-5878
Comments or Questions?