Property-transfer structure where the buyer takes title subject to an existing mortgage without formally taking over the debt in the same way as an assumption.
A subject-to mortgage transaction is a property transfer in which the buyer takes title subject to an existing mortgage while the old loan remains in place and the buyer does not step into the debt in the same formal way as a true mortgage assumption.
Subject-to transactions matter because they can preserve an attractive existing loan without going through a standard new-origination process. But they also create a sharper legal and credit-risk split between who owns the property, who makes the payments in practice, and who is still directly liable on the original note.
The buyer takes ownership of the property while the existing mortgage stays attached to it. In practical terms, the buyer may make or fund the ongoing payments, but the seller often remains the original borrower on the debt.
| Structure | Title transfer | Formal debt transfer | Core risk |
| — | — | — | — |
| Subject-to mortgage | Yes | Usually no | Seller liability and due-on-sale exposure remain |
| Assumption of mortgage | Yes | Yes | Buyer must qualify and lender approval usually matters |
| Wraparound mortgage | Yes | New financing wraps the old debt | Layered credit and payment-structure risk |
That distinction is why subject-to deals are often discussed in the same breath as Assumption of Mortgage, but they are not the same transaction.