Loan Assumption Economics Calculator

Assuming below-market loans creates buyer value. This calculator sizes the savings.

Loan balance

Assumable rate

Market rate

Remaining years

Assumption fee %

Net assumption value

$2,070,000

Gross rate savings

$2,250,000

Assumption fee

$180,000

How the math works

Gross savings = balance × rate delta × remaining years. Net = gross − assumption fee.

Below-market assumable loans often get under-priced in seller marketing materials. A 10-year-old loan at 4.25% with 5 years remaining in today's market can add 5-10% to the deal value — ask about assumability during first offer review, not at diligence.

How to Use

Enter assumable loan balance.
Enter assumable rate %.
Enter current market rate %.
Enter remaining term years.
Enter assumption fee %.
Read assumption value to buyer.

Frequently Asked Questions

When assumption is valuable?

Assumable rate materially below current market rate. 50+ bps difference typically worth pursuing. 200+ bps difference: assumption can add 5-15% to purchase price without changing buyer's effective cost.

Fee structures?

0.5-1% of balance on most CMBS/agency. 1-3% on some life co. Legal + appraisal + servicer fees usually $20-50k. Plus lender equity/credit approval process that can take 60-90 days.

Deal structure?

Seller often prices below-market assumable loan into purchase price (captures value). Buyer can insist on sharing benefit. Competitive buyers may concede premium to secure deal with assumption; below-market loan is rare edge.

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.