The lender still has to qualify the new borrower under the same stress tested standard CMHC applies to any other mortgage application, testing at the higher of the contract rate plus two points or a 5.25 percent floor, so an assumption does not skip underwriting.
The buyer's needed mortgage amount rarely matches the seller's remaining balance exactly, so the gap between the purchase price and the assumed balance typically has to be covered with cash or a second charge at current rates.
Releasing the original borrower from liability on the mortgage is a separate step the lender has to approve, and it does not happen automatically just because a buyer took over the payments. Get your hand-reviewed valuation from Joel Dyck.