Mortgage Rate Under 4%? Your Loan May Be Assumable. Here's How to Market It

Sources: Freddie Mac Primary Mortgage Market Survey, September 24, 2026; HUD Handbook 4155.1, Chapter 7, Assumptions; VA Home Loan Guaranty Buyer's Guide (April 2022) and the VA funding fee page (updated September 22, 2026); 7 CFR 3555.256 on eCFR (current as of September 24, 2026); Fannie Mae Servicing Guide D1-4.2-02; Regulation Z, 12 CFR 1026.24 and its Official Interpretation 2(a)(2); the Utah Assumption Addendum to Real Estate Purchase Contract (state approved, effective August 17, 1998). Page last updated September 28, 2026.

What does it mean when a mortgage is assumable?

An assumable loan is one a buyer can take over when they buy your home. They step into your balance, your interest rate and the years you have left, and they keep making your payment. For that part of the price, they don't get a new mortgage at today's rates.

They still have to qualify. The company you send your payment to, your servicer, reviews the buyer's credit and income much the way a lender would. That matters because most mortgages have a due-on-sale clause, which lets the lender call the whole balance due if the home sells and the loan isn't paid off. Even the Utah Association of REALTORS® listing agreement warns about it in its due-on-sale section (Section 15). An approved assumption is how the loan stays in place with the lender's OK. It isn't a way around the lender.

Why is a rate that starts with a 2 or a 3 worth money to a buyer?

Because the buyer pays your rate on the part they take over, and today's rates are much higher. Freddie Mac's 30-year fixed average was 7.03% on September 24, 2026, per its Primary Mortgage Market Survey. Here's what that difference looks like on one example balance.

Example: monthly principal and interest on the same $350,000

Option	Payment
Take over $350,000 at 3.00% with 25 years left	about $1,660
New 30-year loan for $350,000 at 7.03%	about $2,336
Difference	about $676 a month

Now compare that with a price cut. Cutting $20,000 off the price lowers a buyer's payment on a new 30-year loan at 7.03% by about $133 a month. To lower their payment by $676 with a price cut alone, you'd have to cut roughly $101,000.

Example only, not a quote: principal and interest on fixed-rate loans, with taxes, insurance and mortgage insurance extra. 7.03% is Freddie Mac's 30-year average for September 24, 2026. A buyer's real numbers come from your servicer and a licensed lender, and the buyer must qualify and cover the gap between your price and your balance.

Which loans can be assumed?

Only your servicer can say yes for your loan. Here's what the rules say by loan type.

• FHA. HUD's handbook says all FHA-insured mortgages are assumable. Loans closed on or after December 15, 1989 require the buyer to pass a credit review by the servicer, and HUD gives the servicer 45 days from the day it has every document to finish it. When a creditworthy buyer assumes one of those loans, the servicer releases the original borrower (HUD Handbook 4155.1, Chapter 7).
• VA. The VA's Buyer's Guide says anyone can assume a VA loan if they qualify, veteran or not, with the servicer's approval and sometimes VA's. If the buyer is a veteran who substitutes their own entitlement, VA can restore yours. If not, your entitlement stays with the loan. The VA funding fee on an assumption is 0.5%.
• USDA. A USDA guaranteed loan can be assumed with the agency's approval. The buyer has to meet USDA's eligibility rules and pay a new guarantee fee, and the rule says the original borrower stays personally liable (7 CFR 3555.256).
• Conventional. Most have a due-on-sale clause. Fannie Mae's rules make servicers enforce it unless a transfer is approved, and they allow approved assumptions mainly on adjustable-rate loans (Fannie Mae Servicing Guide D1-4.2-02). So some conventional loans can be assumed, and a fixed-rate conventional loan usually can't.

That's why I say your loan may be assumable, not that it is. The call to your servicer settles it.

What's the catch?

The buyer takes over your balance, not your price. If your home sells for $500,000 and the buyer assumes $350,000, they have to bring the other $150,000 to closing, in cash or with a second loan, plus their closing costs and any fee the servicer charges for the assumption. A second loan is priced at today's rates, not yours, so the buyer's overall cost lands somewhere between the two.

That narrows your pool to buyers who have the cash or a plan for the gap. It's a reason to market the loan, not a promise of a higher price or a faster sale. Plan for time, too. The buyer applies with your servicer, and the review runs on its own clock, like the 45 days HUD allows on an FHA loan.

How do I market a low-rate loan when I sell?

This is the order I work in with a homeowner whose rate starts with a 2 or a 3.

1. Call your servicer. Ask four questions. Is my loan assumable? What does a buyer need to qualify? What fees apply? Will I be released from liability when it's assumed?
2. Write down your numbers. Your balance, your rate, your principal and interest payment and the years you have left, straight from your latest statement.
3. Put it in the listing. The line is "assumable loan, subject to servicer approval." Federal Truth in Lending advertising rules apply to anyone who advertises credit terms, agents included (Regulation Z, Official Interpretation 2(a)(2)-2). A rate in an ad has to be stated as an annual percentage rate, and a payment amount brings more required disclosures (12 CFR 1026.24). So if your rate goes into an ad, it's stated that way, from your loan documents.
4. Show buyers the math. Their payment on your loan next to their payment on a new loan, with the gap they'd have to cover spelled out, like the example above.
5. Write the offer with the assumption addendum. Utah's state-approved Assumption Addendum puts the loan in the purchase contract. The buyer agrees to apply with your servicer and sets a cap on the assumption fees and any rate increase they'll accept. There's also a box that makes the sale depend on you being released from liability. Whether a release is available depends on your loan program, so ask your servicer before you check it.

What I don't do: I'm not a lender or a loan originator. I don't take loan applications, quote loan terms or get paid by a lender, a servicer or an assumption company. The buyer works with your servicer on the loan. I handle the listing, the marketing and the contract.

Thinking about selling a home with a low rate?

I'll run your numbers with you: your payment next to today's rate, the gap a buyer would need to cover, and what you'd walk away with. It starts with a free CMA for your home. When you list, my Smart Seller Program lists homes for as little as 1% plus a $495 transaction fee at closing. Buyer agent commission? Negotiable. You decide it with each offer. You're never locked in. Cancel anytime.