# How do I calculate the 'Equity Gap' in an assumption?

> # How do I calculate the 'Equity Gap' in an assumption?

Category: Strategy
Last verified: 2026-04-14
Source: https://ratellow.com/faqs/strategy/how-do-i-calculate-the-equity-gap-in-an-assumption

## Answer
# How do I calculate the 'Equity Gap' in an assumption?

The buyer must come up with the difference between the Purchase Price and the assumed Mortgage Balance. The equity gap is the difference between purchase price and assumed mortgage balance; the down payment required depends on the mortgage terms and LTV, typically minimum 5% to 20% depending on price, not necessarily 30-50%.

**Data Summary:**

| Item                | Value      |
|---------------------|------------|
| Price               | $800,000   |
| Assumed Mortgage    | $500,000   |
| Required Cash       | $300,000   |

**Strategy:** If the buyer lacks cash, they can sometimes take a 'Second Mortgage' to fill the gap, though this is rare and high-risk.

## Related guide
- https://ratellow.com/guides/assumable-mortgages-2026

## Sources
- Final Capital Adequacy Requirements Guideline (2026) — https://www.osfi-bsif.gc.ca/en/news/backgrounder-final-capital-adequacy-requirements-guideline-2026
- BANKOFCANADA — https://www.bankofcanada.ca/2025/07/staff-analytical-note-2025-21/#Introduction