By Benjamin Finnerty (S), REALTOR® (RS-83812) with Keller Williams Realty Maui · Kīhei, Maui · 808-481-9748

Quick Answer: An assumable mortgage lets a Maui buyer take over a seller’s existing FHA or VA loan, including its interest rate, if the loan servicer approves. With Freddie Mac’s 30-year average at 7.40% on October 15, 2026, versus a record low of 2.65% in January 2021, assuming a low-rate loan can cut the monthly payment, but the buyer must cover the seller’s equity.

I’m Benjamin Finnerty, a REALTOR® in Kīhei with Keller Williams Realty Maui, and here’s what an assumable mortgage on Maui can and can’t do for buyers and sellers right now. With rates holding above 7% this fall, a seller’s low-rate loan can be one of the most valuable things attached to a listing, and most people don’t know to ask about it.

This is general information, not tax or legal advice. Confirm your situation with a CPA or Hawaiʻi attorney, and confirm loan terms with the servicer.

What is an assumable mortgage, and which loans qualify?

An assumable mortgage is an existing home loan that a qualified buyer takes over, keeping the original rate, balance and remaining term. FHA and VA loans are generally assumable with the servicer’s approval of the buyer’s credit. Most conventional fixed-rate loans contain a due-on-sale clause, so they usually can’t be assumed.

For FHA loans, HUD’s servicing rules allow the lender to call the loan due if it’s assumed without credit approval, and require servicers to give the buyer and seller HUD’s notice about release of personal liability before settlement.

How much could assuming a loan save on a Maui home?

The savings come from the rate gap. Freddie Mac’s survey put the 30-year fixed average at 7.40% on Thursday, October 15, 2026, unchanged from the prior week and up from 6.27% a year earlier. Loans written in 2020 and 2021, when Freddie Mac’s average hit a record low of 2.65% in the first week of January 2021, often carry rates far below today’s.

Here’s an illustration with hypothetical numbers: a $500,000 loan balance with 25 years left, compared with a new 30-year loan for the same amount (principal and interest only; taxes, insurance, HOA dues and mortgage insurance not included).

Scenario	Rate	Term	Monthly P&I
Assume existing loan	3.25%	25 years left	about $2,437
New loan, same amount	7.40%	30 years	about $3,462

That’s roughly $1,025 a month in this example. Your numbers will differ, so run them with a lender.

What does it cost to assume an FHA or VA loan?

Assumption fees are modest compared with closing on a new loan. In 2024, FHA doubled the maximum servicer fee for processing an assumption from $900 to $1,800, according to the National Association of REALTORS® and Inman. For VA loans, VA’s funding fee on an assumption is 0.5% of the loan amount, and it can be paid at closing or added to the balance.

You’ll still have typical escrow, title and insurance costs, and the servicer may charge for a credit report.

What happens to a seller’s VA entitlement?

This is the question VA sellers need answered first. According to VA, a veteran can restore the entitlement used on a loan if a qualified veteran-transferee assumes the loan and substitutes their own entitlement. If a non-veteran assumes the loan, the seller’s entitlement can stay tied to that loan until it’s paid off, which can affect their ability to use a VA loan again. My post on VA home loans on Maui in 2026 covers entitlement and loan limits.

What’s the catch with assumable mortgages on Maui?

The equity gap. The buyer takes over only the remaining balance, so the difference between the price and that balance has to come from cash or a second loan. On Maui, that gap can be large. The REALTORS® Association of Maui reported a September 2026 single-family median of $1,150,000 and a condo median of $660,000, per Maui Now on October 9, 2026.

In the example above, a $900,000 sale with a $500,000 balance leaves a $400,000 gap. A second loan would carry today’s higher rates, so the blended payment matters more than the first-loan rate alone.

Other points to check:

• Timing. The servicer controls the approval, so build extra time into the contract.
• Release of liability. Sellers should confirm in writing that they’re released from the loan after the assumption.
• Loan type. Confirm with the servicer that the specific loan is assumable before you count on it.

How does an assumption compare with a rate buydown?

Both aim to lower the buyer’s payment. A buydown uses a seller credit to reduce the rate on a new loan, often temporarily, while an assumption keeps the seller’s existing rate for the remaining term. See my guide to rate buydowns and seller concessions on Maui and Fannie Mae’s 2027 mortgage rate outlook.

My Take: What I’m Telling Buyers and Sellers About Assumable Loans

For sellers with an FHA or VA loan from the low-rate years, the loan can be a real selling point. Confirm with your servicer that it’s assumable, find out the balance and remaining term, and, if you’re a veteran, understand what happens to your entitlement before you advertise it.

What an assumable loan doesn’t change is how the price gets set. I walk sellers through what is actually selling and extremely recent comparable properties, so pricing starts from reality rather than what happened three to six months ago. A low rate can widen the pool of buyers who can afford the payment, but it doesn’t replace the comps.

For buyers, ask early whether a listing has an assumable loan, and talk to a lender about how you’d cover the equity gap. Compare the full monthly cost, including any second loan, against a new loan or a buydown before deciding.

Frequently Asked Questions

Are conventional loans assumable on Maui?

Most conventional fixed-rate loans have a due-on-sale clause and aren’t assumable. FHA and VA loans generally are, with servicer approval.

Do I have to be a veteran to assume a VA loan?

Not necessarily, but if a non-veteran assumes it, the seller’s VA entitlement may stay tied to the loan. A qualified veteran buyer can substitute their entitlement, per VA.

What does it cost to assume an FHA loan?

FHA caps the servicer’s assumption processing fee at $1,800 (raised from $900 in 2024), plus normal closing costs.

What were mortgage rates in October 2026?

Freddie Mac’s 30-year fixed average was 7.40% and the 15-year was 6.71% on October 15, 2026.

Ask Benjamin

If you’re selling a Maui home with an FHA or VA loan, or you want to find listings where an assumption might work, I’m glad to help. I’m Benjamin Finnerty, REALTOR® with Keller Williams Realty Maui in Kīhei. Call or text 808-481-9748 or email benjamin@the808team.com.

Sources: Freddie Mac Primary Mortgage Market Survey (Oct. 15, 2026; Jan. 7, 2021); VA.gov funding fee and entitlement pages; HUD Single Family Housing Policy Handbook 4000.1 (assumptions); National Association of REALTORS® and Inman (FHA assumption fee, May 2024); REALTORS® Association of Maui via Maui Now (Oct. 9, 2026).