Startup aims to bring assumable mortgages to the masses 

In a housing market where high interest rates have greatly impacted affordability and inventory, a new California-based startup is betting big on a mortgage strategy that could offer substantial savings to buyers.

This month, proptech veteran Andy Taylor launched RetroRate — part home search portal and part concierge service — to tap into what he sees as a major opportunity to develop a market around the lesser known and still somewhat complicated assumable mortgage, and in the process, seeks to unlock affordability for homebuyers, demand for sellers, and sales volume for agents.

An assumable mortgage is one that allows a homebuyer to take over the seller's mortgage — including its interest rate and remaining balance — potentially saving hundreds, or even thousands of dollars, each month compared to a new loan at today's interest rates. 

Taylor, a former product management lead at Redfin and founder of the mortgage startup Approved, which was acquired by Credit Karma in 2018, said the inspiration for RetroRate came during his time managing mortgage rate tables at Credit Karma. While tracking rising rates in 2020 and 2021, he stumbled across the home financing option. 

"I've been in the business since 2009, and I had never heard about assumable loans," Taylor told Real Estate News. "It was almost shocking."

Unlocking an underused strategy 

While the trend gained some footing after mortgage rates started to climb in 2022 — following a period of historically low rates that led to the mortgage rate lock-in effect — assuming a mortgage can be complicated and take longer to close compared to a new loan origination. Currently, only government-backed mortgages such as FHA, VA and USDA loans are eligible, though Taylor believes this could change in the near future if private lenders see an opportunity to tap into this niche loan type. 

According to Taylor, RetroRate's analysis of MLS and property data suggests that between 20% and 25% of homes on the market have assumable loans. Yet awareness and execution of these transactions remain low due to outdated, paper-based processes and a lack of centralized tools. Another startup, Roam, launched in 2023 to help shepherd buyers through the assumable loan process, but it remains a relatively "brute force" endeavor.

At its core, RetroRate acts as a searchable, proprietary database of homes — both listed and off-market — with assumable mortgages and then ranks listings based on their financial appeal, allowing agents and buyers to identify options with meaningful monthly savings, he explained. 

In return for the service, buyers pay a fee equal to 1% of the home sale price at closing, Taylor said, describing it as something like a "supercharged rate buy-down," but with significantly shorter payback periods.

"Our goal is to make assumable loans just another financing type, like a 30-year fixed or a 5/1 ARM," Taylor explained. "We don't want agents to become experts in this process — we want to be the ones that make it easy for them."

A process ripe for modernization 

RetroRate formally launched this month after a beta period that included select agents across 10 states, including California, Texas, Florida and North Carolina. Taylor said the company prioritized launch markets based on where assumable loan inventory was meaningful and where affordability pressures were most acute.

Despite the potential benefits, assumable loans come with caveats. Some transactions require large cash payments to bridge the gap between the home's value and the assumed mortgage balance. The assumption process can also take significantly longer than conventional financing due to lender review and legacy paperwork requirements. 

Taylor acknowledged those concerns, but sees them as symptoms of a process ripe for modernization — where improved automation, coupled with agent-focused tools, can significantly reduce friction. 

And Taylor is confident that assumable mortgages will remain relevant even if interest rates decline, arguing that "there is always going to be someone out there who's got that better rate." With the vast majority of homeowners locked in below today's rates, he believes older loans will continue to carry value in the market for years to come.

"RetroRate is not about one narrow trend," he said. "It's about restoring affordability and creating liquidity. That's a mission we can build on no matter what rates do."