Seller Financing Calculator
Seller Financing Payment Comparison
Monthly payment on a $200,000 loan (30-year amortization) at various rates.
| Interest Rate | Monthly Payment | Total Interest (30yr) | 5-Year Balloon | Total Paid w/ Balloon |
|---|---|---|---|---|
| 5% | $1,074 | $186,512 | $186,108 | $250,524 |
| 6% | $1,199 | $231,677 | $188,292 | $260,242 |
| 7% | $1,331 | $279,018 | $190,128 | $269,980 |
| 8% | $1,468 | $328,310 | $191,655 | $279,713 |
| 9% | $1,609 | $379,328 | $192,903 | $289,413 |
| 10% | $1,755 | $431,867 | $193,899 | $299,055 |
How We Calculate This
This seller financing calculator uses established formulas and industry-standard data to provide accurate estimates.
- Enter your specific values into the calculator fields above
- Our algorithm applies the relevant formulas using your inputs
- Results are calculated instantly in your browser — nothing is sent to a server
- Review the detailed breakdown to understand how each factor affects your result
These calculations are estimates based on standard formulas. For critical decisions, always consult a qualified professional.
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Seller financing (also called owner financing) is when the property seller acts as the lender. The buyer makes monthly payments directly to the seller instead of a bank. This opens deals for buyers who can't get traditional financing and gives sellers steady income plus interest.
The basic rule:
- Monthly payment is calculated using standard amortization: the loan amount, interest rate, and term determine the payment
- With a balloon payment, the loan amortizes over the full term but the remaining balance comes due at the balloon date
- Total interest earned by the seller = all payments made + balloon amount − original loan amount
Seller financing is common in commercial real estate, land sales, and when buyers have difficulty qualifying for bank loans. Sellers benefit from interest income and can often negotiate a higher sale price. Both parties should use a real estate attorney to draft the promissory note and deed of trust.
When Would You Use This Calculator?
This seller financing calculator is designed for anyone who needs quick, reliable estimates without complex spreadsheets or professional consultations.
- When you need a quick estimate before committing to a purchase or project
- When comparing different options or scenarios side by side
- When planning a budget and need to understand potential costs
- When you want to verify a quote or estimate you've received from a professional
- When teaching or learning about the concepts behind these calculations
Frequently Asked Questions
What is seller financing?
Seller financing is when the property seller provides the loan directly to the buyer instead of a bank. The buyer makes a down payment and then monthly payments (with interest) to the seller over an agreed term. The seller holds a promissory note secured by the property via a deed of trust or mortgage.
What is a balloon payment?
A balloon payment is a large lump-sum payment due at a specified date before the loan is fully amortized. For example, a 30-year amortization with a 5-year balloon means payments are calculated as if the loan runs 30 years, but the entire remaining balance is due after 5 years. The buyer typically refinances to pay the balloon.
What interest rate is typical for seller financing?
Seller financing rates typically range from 5-10%, often 1-3% above conventional mortgage rates. The rate is negotiable between buyer and seller. Higher rates compensate the seller for the risk of not receiving a lump-sum payment, while still being accessible to buyers who can't qualify for bank loans.
What are the benefits for the seller?
Sellers benefit from monthly interest income (often at rates above bank deposits), potential tax advantages through installment sale treatment (spreading capital gains over time), a larger pool of potential buyers, and often a higher sale price. The property serves as collateral.
What are the risks for the buyer?
Key buyer risks include the balloon payment coming due before they can refinance, the seller not having clear title, higher interest rates than bank loans, and less consumer protection than regulated bank mortgages. Always use a real estate attorney and get title insurance.
Is seller financing legal?
Yes, seller financing is legal in all 50 states. However, the Dodd-Frank Act restricts seller financing to 3 or fewer properties per year for non-licensed sellers and requires certain consumer protections (ability-to-repay standards). Owner-occupied properties have additional regulations. Consult an attorney for compliance.