Loans – Take Over Someone's Debt? Find Relief Fast (2026)

Have you ever found yourself in a situation where someone you know is struggling with their mortgage, and you're considering stepping in to take over their loan? Perhaps it's a family member, a friend, or even an investment opportunity that has captured your attention. The idea might seem straightforward at first, but there's a lot to consider before diving in. Let's explore what it really means to take over someone else's loan and what steps you need to follow to make it happen.

Understanding Taking Over Someone's Loan

Taking over someone else's loan, often referred to as a loan assumption, involves becoming the responsible party for an existing loan rather than starting a new one. This process can be appealing because it allows you to bypass the costs associated with originating a new loan. However, not all loans are assumable, and lenders typically have specific criteria you must meet before they allow a transfer of loan responsibility.

Current Market Information and Requirements

In 2026, the Australian mortgage market continues to see varied interest rates depending on the type of loan and borrower profile. Current interest rates for variable home loans range from 6.49% to 7.85%, while fixed rates can be slightly higher. Assuming a loan could mean inheriting a more favourable interest rate if the original loan was secured during a period of lower rates.

Eligibility criteria for assuming a loan generally include a solid credit history, a stable income, and meeting the lender's serviceability requirements. It's crucial to ensure that the loan in question is assumable, as not all loans come with this option. Esteb and Co, with access to over 83 lenders, can help you navigate these requirements.

Steps to Take Over Someone's Loan

Taking over a loan requires careful planning and execution. Here’s a step-by-step guide to help you through the process:

1. Verify Loan Assumability: Check with the lender to confirm if the loan is assumable. This is a crucial first step, as not all loans have this feature.
2. Assess Your Financial Situation: Ensure that you meet the financial criteria set by the lender, including credit score, income stability, and debt-to-income ratio.
3. Submit an Assumption Request: Once you have confirmed the loan is assumable and you meet the criteria, submit a formal request to the lender. This will likely require financial documentation similar to a standard loan application.
4. Undergo Credit Evaluation: The lender will conduct a credit check and evaluate your financial standing to determine your ability to take over the loan.
5. Complete Legal Documentation: If approved, you'll need to complete the necessary legal paperwork to transfer the loan into your name.
6. Finalize the Transfer: Once all parties have signed the required documents, the lender will officially transfer the loan to you.

Tips and Considerations

Before you decide to take over someone’s loan, consider these expert tips:

• Understand the Costs: While you might save on some fees, there could be assumption fees or legal costs involved. Factor these into your decision.
• Review the Loan Terms: Take the time to thoroughly understand the terms of the existing loan. This includes interest rates, remaining loan term, and any penalties for early repayment.
• Seek Professional Advice: Consulting a mortgage broker, like those at Esteb and Co, can provide valuable insights and guidance tailored to your situation.
• Consider the Long-term Impact: Think about how assuming the loan affects your long-term financial goals and stability.

Frequently Asked Questions

• Can any loan be assumed?
  Not all loans are assumable. It's essential to check with the lender to confirm if the loan you are interested in can be assumed.
• What happens if I don't qualify for the loan assumption?
  If you don't meet the lender's criteria, you may not be able to assume the loan. In this case, exploring other financial options or improving your financial situation may be necessary.
• How long does the loan assumption process take?
  The process can vary but generally takes a few weeks to a few months, depending on the lender's requirements and the complexity of the transfer.
• Are there fees associated with loan assumption?
  Yes, there may be fees involved, such as assumption fees and legal costs. It's important to factor these into your decision.
• What are the benefits of assuming a loan?
  Assuming a loan can allow you to take advantage of lower interest rates and potentially save on some upfront costs compared to taking out a new loan.
• Can I negotiate the terms of the loan I am assuming?
  Typically, the terms of the existing loan remain unchanged. However, discussing your options with the lender might provide some flexibility.
• What role does a mortgage broker play in this process?
  A mortgage broker can help you understand your options, liaise with lenders, and guide you through the process efficiently. Esteb and Co's access to 83+ lenders can be particularly beneficial.