Assumption Vs Refi Decision Calculator

Assumption captures below-market debt.

Loan balance

Existing rate %

New loan rate %

Years remaining

Assumption fee %

Refi costs %

Assumption advantage

$2,325,000

Interest savings

$2,250,000

Assumption vs refi fee diff

$75,000

How the math works

Rate diff = new − existing. Interest savings = balance × diff × years. Fee diff = refi − assumption.

$15M × 3% × 5 = $2.25M interest savings. + $75k fee diff = $2.33M advantage. Strong case for assumption.

How to Use

Enter loan balance.
Enter existing rate %.
Enter new loan rate %.
Enter years remaining.
Enter assumption fee %.
Enter refi costs %.
Read assumption advantage.

Frequently Asked Questions

Assumption mechanics?

New buyer takes over existing loan. Lender reviews and approves buyer. Buyer pays: assumption fee (0.5-1.5% of balance), legal costs, existing loan terms continue. Alternative: pay off existing, refinance with new loan at current rates.

When favorable?

Existing rate far below current market. Low rate locks for remaining years save substantial interest. 2024-25 market: assumption of 3-4% loans vs new at 6-7% can save $100k-1M+ over remaining term.

Obstacles?

Lender approval required. Good-quality buyer credit. Buyer often wants more loan than assumable balance — requires mezzanine or equity. Complex on CMBS (defeasance vs assumption). Time-intensive due diligence (30-90 days).

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.