In seller financing, the seller acts as the lender — the payment math is identical to any amortizing loan; what’s different is who holds the note.
How it works
The down payment is subtracted from the sale price to find the financed loan amount. That amount is amortized over the agreed term at the agreed rate to find the monthly payment, using the same formula as a traditional mortgage.
What this does not include
Many seller-financed deals include a balloon payment after a shorter period (e.g., a 5-year balloon on a 30-year amortization schedule) rather than a full-term payoff — this calculator computes the standard full-term payment, not a balloon structure.
How to use this calculator
- Enter the sale price, down payment, agreed interest rate, and loan term.
Frequently asked questions
Why would a seller offer financing?
It can attract buyers who don’t qualify for traditional financing, allow a faster sale, and let the seller earn interest income on the note instead of a lump-sum sale price.
Is seller financing riskier for the seller?
Yes, generally — the seller takes on the buyer’s credit and default risk directly, which a traditional sale to a cash or bank-financed buyer avoids entirely.
Can seller financing terms be renegotiated later?
Only if both parties agree — the note terms are set at closing like any loan agreement, and changing them later requires mutual consent, not a unilateral request from either side.
