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Free seller financing calculator

Seller Financing Calculator

Use this free seller financing calculator for real estate to model the seller note, the balloon payment, an interest-only period, rental cash flow and DSCR, the refinance exit, and the seller’s installment-sale tax. It is built for owner-financed rental deals, not just a monthly payment quote.

  • No signup
  • Payment, balloon, and interest-only
  • DSCR and refinance stress
  • CSV and print

Updated Oct 29, 2026 · Educational estimate, not legal or tax advice

Rental Property Math

Seller Financing Calculator

Deal inputs

Every field updates the results in real time.

View as

The numbers stay the same; the summary changes to the decision you are making.

Presets
Acquisition

The contract price the buyer and seller agree to.

Cash the buyer brings at closing. The seller note is the balance.

Title, escrow, recording, legal, and other buyer-side costs.

Cash spent after closing before the rental is stabilized.

The seller's loan balance that must be paid from the down payment.

Seller note

The interest rate stated in the seller-financing note.

The schedule used to calculate principal and interest.

Use 0 for a fully amortizing note. A balloon is due at the end of this term.

Use 0 for principal and interest from the first payment.

Use and compliance

The Reg Z seller-financer exemption is generally limited to three properties in 12 months.

The coverage you want from NOI. 1.20x is a common rental target.

Saved scenarios

Stored in this browser only.

0 / 20

    No saved scenarios yet. Save a note to reload it later or compare two terms.

    Compare scenarios

    Compare two seller notes side by side.

    Set the current deal as A, then change the note terms and set it as B. Saved scenarios can also be assigned to either side.

    Next step

    A seller note changes who carries the credit risk. Check the same deal against a lender’s DSCR requirement before you rely on a refinance.

    Test the refinance with DSCRCheck the cash return

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    Use the free responsive embed. It keeps the same math and links back to the full tool.

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    Seller financing calculator guide

    What is a seller financing calculator?

    A seller financing calculator models the purchase-money note a property owner agrees to carry. The note amount is the purchase price minus the down payment. From there, the tool builds the monthly payment, amortization schedule, balloon balance, rental cash flow, and refinance result. This real estate seller financing calculator also shows the seller’s installment-sale tax, so both sides can compare the note with a cash sale.

    How the seller financing calculator works

    The note, the rental, and the seller’s exit stay connected. Change one assumption at a time.

    01

    Set the note terms

    Enter the price, down payment, note rate, amortization, balloon, and any interest-only years. The calculator builds the payment and the balloon balance.

    02

    Add the rental numbers

    Add rent, vacancy, management, maintenance, capital reserves, taxes, insurance, and HOA. The tool returns NOI, cash flow, cash-on-cash return, and DSCR.

    03

    Stress the exit and tax

    Project value at the balloon, apply a refinance LTV and closing costs, then compare the installment-sale tax with a cash sale.

    The math and the exit

    Seller financing calculator with balloon payment

    The note payment is a standard amortization calculation on the amount financed. The balloon payment is the balance left when the balloon term ends. A short balloon with a long amortization keeps the payment low and pushes more principal to the refinance. The seller financing formula guide walks through the payment and balloon math line by line.

    Payment formula

    Payment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)

    P = note amount, r = monthly rate, n = amortization payments.

    In the default example, the $228,000 note at 7.00% over 30 years pays $1,517 per month and leaves a $214,620 balloon after 5 years.

    Example deal

    Purchase price
    $285,000
    Down payment
    $57,000 (20%)
    Seller note
    $228,000 at 7.00%
    Monthly payment
    $1,517
    Monthly cash flow
    $226
    Balloon in year 5
    $214,620
    DSCR
    1.15x
    Refinance cash out at 75% LTV
    $26,980

    A low payment is not the same as a safe deal.

    If the balloon depends on appreciation, run the flat-value case too. A refinance that only works at an optimistic value is a rollover risk, not an exit plan.

    Test the refinance with the DSCR loan calculator, then read the seller financing vs. bank DSCR guide. For the seller’s side, see the installment-sale tax guide and the Reg Z and AFR guide.

    Interest-only seller financing calculator

    An interest-only period lowers the initial payment because the buyer pays interest but no principal. The payment is note balance × annual rate ÷ 12; on the $228,000 default note at 7.00%, that is about $1,330 per month. After the period, the payment steps up to the amortizing amount, and the balloon is larger because less principal was paid down. Enter the interest-only years to see both payments and the balloon balance. These terms do not build equity and they add refinance risk.

    How fully amortizing, balloon, and interest-only seller financing compare
    StructurePaymentBalloonMain risk
    Fully amortizingPrincipal and interest, full termNoneHighest payment
    30-year amortization, 5-year balloon30-year scheduleDue at year 5Refinance risk
    Interest-only, then amortizingInterest only, then amortizingLarger balancePayment step-up

    Swipe the table to see every column.

    Real estate seller financing calculator for rental property

    A rental property needs more than a payment. The calculator also builds NOI from rent, vacancy, management, maintenance, capital reserves, taxes, insurance, and HOA, then returns monthly cash flow, cash-on-cash return, and DSCR. In the default example, the note is covered but the 1.15 DSCR is below the 1.20 target, so the deal is flagged as tight coverage.

    The seller’s side compares an installment sale with a cash sale, separates recapture from deferred gain, checks the note rate against the applicable federal rate, and compares the seller note with a bank loan.

    Run the same deal through the rental cash flow calculator, cash-on-cash return calculator, and cap rate calculator. For the exit, use the DSCR loan calculator and the seller financing vs. bank DSCR guide.

    Common questions

    Seller financing calculator FAQ

    Need the assumptions behind the numbers? Read the methodology.

    How is a seller financing payment calculated?

    The seller note is the purchase price minus the down payment. The calculator amortizes that note at the stated rate and term. With a balloon, the payment is based on the longer amortization while the remaining balance is due at the end of the balloon term.

    What happens at the balloon?

    The buyer must pay the remaining balance, refinance it, or negotiate an extension. The calculator projects value at the balloon, applies your refinance LTV and closing costs, and tests whether the new loan clears the balloon and covers the rent.

    What is a good DSCR for seller financing?

    There is no single answer. Many investors use 1.20x to 1.25x for NOI divided by debt service. Seller financing can close with lower coverage because the seller carries the credit risk, but a thin cushion still leaves the buyer exposed at the balloon.

    Does the seller owe tax at closing?

    An installment sale can defer part of the gain, not all of it. Depreciation recapture is generally taxed in the year of sale, and gain is reported as principal is received. The calculator shows closing-year tax, deferred tax, the yearly schedule, and the present value of the deferral.

    What is the applicable federal rate?

    The AFR is the minimum rate the IRS publishes for certain below-market loans. Seller financing below the AFR can create imputed interest and tax consequences. The calculator flags the note rate against the AFR tier, but does not provide tax advice.

    Does Reg Z apply to seller financing?

    Consumer-purpose owner-occupied financing can be covered by Reg Z and ability-to-repay rules. Business-purpose rental financing generally is not. The seller-financer exemption is limited and fact-specific, so use the compliance guardrails as questions for counsel.

    What is a seller financing calculator with balloon payment?

    It separates the amortization term from the balloon term. The payment is based on the longer amortization schedule, while the unpaid balance is due at the end of the balloon term. This calculator also projects the refinance needed to clear it and the seller’s installment-sale tax.

    How does interest-only seller financing affect the balloon?

    An interest-only period lowers the initial payment because no principal is paid, so the balloon balance is larger than on an amortizing note with the same rate and term. The calculator shows both the interest-only payment and the payment after the step-up.

    Seller financing and borrowing

    Seller financing and borrowing FAQ

    These answers cover seller financing rates, typical terms, deal structure, business loan payments, and home equity borrowing. For the note math, read the seller financing formula guide.

    What is a good rate for seller financing?

    There is no single market rate. A practical starting point is the rate a bank or DSCR lender would charge on the same rental, adjusted for the seller’s risk and the buyer’s down payment. Many seller-financed rental deals are quoted near or slightly above comparable mortgage rates, often in the roughly 6%–9% range in recent markets. The IRS AFR is a tax floor for below-market loans, not a market rate.

    What is the payment on a $1,000,000 business loan?

    On a fully amortizing $1,000,000 loan, the monthly payment is about $12,133 at 8% over 10 years, $7,753 at 7% over 20 years, or $6,653 at 7% over 30 years. Fees, interest-only periods, and a balloon change the cost. A seller-financed business or real estate note uses the same amortization math, and this calculator lets you add a balloon or interest-only period.

    What is typical seller financing?

    Terms are negotiable and vary by property and market. A common structure is 10%–30% down, a 5–30 year amortization, a rate near comparable bank financing, and a balloon in 3–10 years. Some sellers offer an interest-only period. The note is usually secured by a mortgage or deed of trust, and the buyer often pays closing costs. The seller’s need for cash, the buyer’s credit, and the property’s income drive the final terms.

    What is the downside of seller financing?

    Buyers face refinance risk at the balloon, potentially higher pricing, and less consumer protection than a bank loan. Sellers face credit risk, liquidity risk, legal and compliance exposure, and the possibility that the note is hard to sell. Both sides should verify title, lien position, insurance, and the due-on-sale clause, and have the note and security instrument reviewed by professionals.

    What is the cheapest way to borrow money against your house?

    The cheapest option is usually the one with the lowest all-in cost for the amount and term. A cash-out refinance can be cheapest for a large amount because it replaces the first mortgage at first-lien pricing, but it adds closing costs and resets the term. A home equity loan or HELOC can be cheaper for a smaller amount because it leaves the existing first mortgage in place. Compare the APR, closing costs, term, and fixed versus variable rate.

    How do you structure a seller financing deal?

    Start with the price, down payment, and note amount (price minus down payment). Set the rate, amortization, balloon, and any interest-only period. Define who pays taxes, insurance, closing costs, and repairs. Use a written promissory note secured by a mortgage or deed of trust and record it. Confirm title, existing liens, the due-on-sale clause, insurance, and compliance with Reg Z, Dodd-Frank, and the AFR. Then test the buyer’s DSCR and the seller’s tax picture.

    Is seller financing worth it?

    It can be. Buyers may get a lower down payment, less paperwork, a faster closing, and a property that banks will not finance. Sellers may get a higher price, interest income, and installment-sale tax deferral. The trade-offs are balloon and refinance risk, credit risk, legal complexity, and reduced liquidity. Run the numbers for both sides, including a flat-value refinance and a cash-sale comparison, before deciding.

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