Seller Financing Calculator
Estimate the payment, interest, seller proceeds and balloon balance for seller financing, owner financing or a land contract. Use the terms in the actual proposed agreement.
How seller financing is calculated
The financed principal equals the sale price minus the down payment. The scheduled monthly payment amortizes that principal over the selected amortization period at a fixed annual rate. If the contract ends earlier, the unpaid principal becomes the estimated balloon payment.
Extra monthly principal is applied after the scheduled interest charge. The calculator iterates each payment because an extra amount changes every later interest charge and the eventual balloon balance.
Worked example
For a US$300,000 sale with 20% down, 6% fixed interest, 30-year amortization and a balloon after five years, the financed principal is US$240,000. The scheduled payment is about US$1,438.92 per month. After 60 payments, the estimated balloon is US$223,330.46 and interest paid to that date is about US$69,665.73.
Seller financing, owner financing and land contracts
These labels can describe arrangements in which the seller accepts payments over time, but the legal documents, transfer of title, security instrument and remedies can differ. This calculator treats them only as the same mathematical task: a price, down payment, fixed rate, amortization schedule and maturity date.
Important limits
This is an educational estimate, not a contract, disclosure, tax calculation, underwriting decision or legal, tax or financial advice. It assumes a fixed rate, monthly compounding and on-time monthly payments. It excludes property taxes, insurance, escrow, servicing fees, late charges, legal costs, variable rates, irregular first periods, interest-only periods, prepayment penalties, defaults and collection costs. Buyer upfront costs are shown only in buyer cash and are not treated as seller proceeds.
Installment-sale tax treatment is not calculated. Interest, return of basis and gain may be treated separately, and special rules can apply when stated interest is too low. Consult qualified local professionals for the proposed transaction and current law.
Official references
- Consumer Financial Protection Bureau: balloon payments — explains why a large final payment can create refinancing and foreclosure risk.
- IRS Publication 537: Installment Sales — covers federal installment-sale concepts, interest, basis and gain; it is not reproduced by this calculator.
Related calculators
- Mortgage Calculator — estimate a conventional home-loan payment and housing costs.
- Land Loan Calculator — model a lender-financed parcel purchase with costs and a balloon.
- Loan Calculator — calculate a general fixed-payment loan.
- Mortgage Payoff Calculator — compare extra principal on an existing mortgage.
Frequently asked questions
What is the balloon payment?
It is the principal still unpaid when the contract reaches its stated maturity. It is not an extra fee. The final amount can differ if payment dates, interest conventions, fees or extra principal differ from the assumptions entered here.
Does the interest rate equal APR?
Not necessarily. This calculator uses the entered rate only to calculate scheduled interest. It does not convert fees or closing costs into an annual percentage rate.
Can I use this for a land contract?
You can use it to estimate the payment and remaining balance when the land contract has fixed monthly amortization terms. It does not model jurisdiction-specific title, forfeiture, recording, disclosure or foreclosure rules.