A Little-Known Way Home Buyers Can Beat High Mortgage Rates

Home prices were already high when Ellen Harper, a software architect living in Atlanta, started searching for a house in 2021. But she couldn’t have anticipated the quick surge in interest rates the next year, and, even with a large down payment, the new math made her uneasy.

This year, however, she stumbled upon what felt like a portal to the not-so-distant past: listings of thousands of homes that come with a low-rate mortgage, which can be transferred from the existing homeowner to a new home buyer, known as an assumable mortgage.

Ms. Harper, who is in her 50s, managed to snag one of these homes, closing two weeks ago on a four-bedroom brick colonial in Fairburn, Ga., with a $1,400 monthly payment. It’s an amount she’ll be able to comfortably afford into retirement thanks, in large part, to a 2.49 percent mortgage rate. That’s less than half the current rate of 7.09 percent on 30-year-fixed loans, the most popular type of mortgage.

“I didn’t want to get a bad mortgage and be in a ball-and-chain situation where all I would be able to do is pay the mortgage,” Ms. Harper said. She found her home through Roam, a start-up that went live in September and that lists homes with assumable low-rate loans and assists buyers through the process.

“There were other homes — they were nice and everything,” she added, “but I went for the lowest rate I could find.”

Assuming a mortgage isn’t some type of gimmick; it’s a built-in benefit on certain government-backed mortgages, as long as the new owners qualify. The process won’t work for all would-be buyers because there are several hurdles they may need to clear before they can claim the keys, often including a hefty down payment. For home sellers, it can be advertised alongside marble countertops, to attract more potential buyers.