Assumable 101
How Much Does It Cost to Assume a Mortgage?
By David Golovin · September 10, 2026 · 3 min read
Assuming a mortgage has two main costs: the downpayment gap and assumption fees. Together they are usually lower than starting fresh with a new loan at today’s rates.
The downpayment gap
This is the big number. You take over the existing loan balance, and cover the difference between the sale price and that balance yourself. On a $420,000 home with a $280,000 balance, you bring $140,000. Across active assumable listings on Roots, the estimated average gap is about $170,000.
| Cost item | Assumption | New loan |
|---|---|---|
| Downpayment | Gap between price and loan balance | 3% - 20%+ of purchase price |
| Origination fee | None | 0.5% - 1% of loan |
| Appraisal | Usually not required | $500 - $800 |
| VA funding fee | 0.5% of balance (VA only) | Up to 3.3% |
| Title + escrow | Standard | Standard |
VA funding fee
For VA loan assumptions, the buyer pays a 0.5% funding fee on the remaining balance. On a $280,000 balance that is $1,400. For comparison, a new VA purchase loan can carry a funding fee up to 3.3%. Source: VA.gov
How to cover the gap
Most buyers use cash. Some combine cash with a second loan or seller financing to bridge the difference. The allowed structure depends on the servicer and loan type. Roots can walk you through what applies to a specific listing.
FAQ
How much does it cost to assume a mortgage?
The biggest cost is the downpayment gap: the difference between the purchase price and the remaining loan balance.
Do you pay closing costs on a mortgage assumption?
Yes, but typically less than on a new loan. You skip the origination fee and usually the appraisal.
How do you cover the downpayment gap on an assumption?
Cash is the most straightforward. Some buyers use a second loan, a home equity line, or seller financing to bridge the gap. The structure depends on what the servicer and loan type allow.
How long does a mortgage assumption take?
Assumptions typically take 60 to 120 days through the seller’s loan servicer. Roots coordinates the process end to end, and our assumption closings average 43 days.