Five percent. 

That’s the “magic number” interest rate that many prospective homebuyers are waiting for before jumping back into the housing market. 

A recent Neighbors Bank survey found 72% of potential buyers had delayed or paused their home search while waiting for mortgage rates to improve. More than half were waiting for rates to reach that magic number, while 34% said they would buy immediately if rates fell to their target, according to Realtor.com. 

But what if there was a way to get an even better rate? 

For some buyers, assuming the seller’s existing mortgage could offer a path to a lower rate. 

A loan assumption allows a qualified buyer to take over an existing mortgage, including its interest rate, remaining balance and repayment terms. With many existing mortgages in the range of 3% to 4%, an assumable loan can make a significant difference. 

Consider a $300,000 mortgage with 30 years remaining. At 3%, principal and interest are about $1,264 per month. At 6.5%, the payment is approximately $1,896 — a difference of $630 each month.  

The first step is determining whether the seller’s loan can be assumed. Every mortgage is different, so sellers should contact their servicer and ask. 

FHA and VA loans provide the clearest opportunities. FHA loans are generally assumable by buyers who qualify, although modern FHA loans generally cannot be assumed for investment properties. VA loans are also assumable, and the buyer doesn’t necessarily have to be a veteran, although rules involving the seller’s VA entitlement may apply. 

Conventional mortgages can be more complicated. Many contain due-on-sale provisions, but assumption isn’t impossible. The loan documents and servicer determine what options are available. 

Another hurdle is the seller’s equity. If a $400,000 home has $350,000 remaining on its assumable mortgage, the buyer must cover the other $50,000. Cash is one option. A second loan is another possibility, but not all lenders want to take a secondary lien position on a home. 

Buyers still need to qualify for a loan assumption from the seller’s lender. And even though the time it takes longer to get an assumption approved than with traditional financing, the monthly savings are worth it.   

So, while you wait for rates to reach that magic 5% mark, it may be worth asking one more question: What rate does the seller already have? 

Dayv Morgan is a Maricopa realtor and owner of HomeSmart Premier.  

480-251-4231 

DayvMorgan@gmail.com 

SPONSORED CONTENT 

 
2026 October InMaricopa Magazine