Michael RushReal Estate Broker, Keller Williams Realty DTC · Real Estate Broker at Keller Williams Realty DTC

How much can an assumable loan save you per month?

3 Feb 2025 · 1 min

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On a $500,000 home with 20% down, the monthly mortgage payment drops from roughly $3,100 at 7% interest to about $2,023 at 3%. That $1,000 monthly difference can make or break whether a buyer can afford the property. Assumable loans with those lower rates are available now.

So I've always been kind of curious, like, how much does a, say, a 3% interest rate differ from a 7.5% interest rate in terms of a monthly payment?
It's huge. It very much depends on the principal amount. On a $500,000 home with a 7% interest rate, that payment's going to be— and we're just assuming the same taxes, the same insurance costs— On both scenarios. Sure. That payment's going to be about $3,000, $3,100 per month, right? At 7%. Okay. That's with a 20% down payment, $100,000. Okay. Now, if you were to get that same property at the 3% interest rate, nothing else changes. Down payment's the same, taxes and insurance are the same. That purchase or that monthly payment is going to be about $2,000 per month. Wow. Just a little bit more, $2,023. So it's about a $1,000 a month decrease in monthly payment.
I mean, that makes the difference to whether I can even get into the property or not. Yeah. So you're saying there are properties like this that are out and available right now? There are. Really? There are. Yep.