Is assuming a mortgage an affordable way into the housing market? What to know

Assuming a mortgage from a seller can be a path for buyers to get a foothold in the housing market at a lower rate. Here's what to know about the niche strategy.

This article is part of Global News’ Home School series, which provides Canadians the basics they need to know about the housing market that were not taught in school.

For hopeful Canadian homebuyers feeling sidelined by the market’s higher interest rates, assuming a mortgage from a seller holding onto a lower rate can be an affordable way to skirt today’s sizeable borrowing costs.

But experts say mortgage assumption comes with risks for the seller and some downsides for buyers that make it a rare feature in home sales.

For Toronto-based Realtor Mikayla Rugala, though, a mortgage assumption was just the ticket her client needed to sell off a condo late last year.

She tells Global News that her client was set to hit the market in the fall, but their pricing hopes were dashed when a nearby comparable unit sold for “significantly lower” than what the seller had in mind.

This came as mortgage rates were hitting a recent peak, which Rugala says meant buyers were either looking for a great deal or were willing to wait until interest rates started to fall.

“We were trying to figure out, how can we encourage buyers and tackle that pain point head on?”

Around that time, Rugala says she heard from another Realtor friend in Ottawa who was telling her about the success their brokerage was having by advertising low, assumable mortgage rates to get buyers interested in properties.