Assuming a seller's low-rate mortgage sounds great in theory. In practice, the equity gap is what usually kills it. First, which loans can even be assumed in a normal sale. On an arms-length purchase, conventional fixed-rate loans generally cannot be assumed, because the due-on-sale clause lets the lender call the loan when the home sells. (Conventional loans can be assumed in specific exempt transfers, such as divorce or inheritance, and ARMs are generally assumable, but neither helps a typical buyer purchasing from a stranger.) FHA, VA, and USDA loans are assumable, with the buyer qualifying through the servicer. Now the catch: an assumption transfers only the loan balance. When a home has appreciated well above what the seller still owes, you have to cover the entire gap between that balance and the purchase price, in cash or with secondary financing. On a home that has gained a lot of value, that gap can be enormous, which puts assumption out of reach for most buyers even when the loan carries an attractive rate. Assumptions were far more common in the early 1980s, when purchase prices were much lower and second mortgages routinely bridged the gap. A buyer might put 10% down, take a second mortgage for another 30%, and assume the original first covering the remaining 60% at its lower rate. That recipe worked when the numbers were small. When prices run high relative to existing loan balances, the cash or second-lien financing needed to bridge the difference usually makes an assumption impractical. Worth asking about on an FHA, VA, or USDA listing. Just go in knowing the equity gap makes or breaks the deal.