Tiny Toolkit

Seller Financing Calculator

Seller financing (owner carry-back) lets buyers and sellers agree on their own terms without a traditional lender. Enter the purchase price, down payment, interest rate, loan term, and an optional balloon payment year to see the monthly payment and total cost of the financing. This is particularly useful for structuring creative deals on investment properties where conventional financing is difficult to obtain.

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Frequently Asked Questions

What is seller financing?
Seller financing (also called owner financing or a seller carry-back) is when the property seller acts as the lender. Instead of taking all cash at closing, the seller receives monthly payments from the buyer. The terms (interest rate, amortization period, balloon payment) are negotiated directly between buyer and seller.
What is a balloon payment?
A balloon payment is a large lump-sum payment due at a specific date before the loan is fully amortized. For example, a loan might be structured with 30-year amortization (monthly payments based on a 30-year schedule) but a 5-year balloon, meaning the remaining balance is due in full after 5 years.
Why would a seller offer seller financing?
Sellers offer financing to attract a larger buyer pool, sell faster, receive interest income instead of a lump sum, potentially defer capital gains tax via installment sale treatment, and negotiate a higher sale price. It's most common in investment property transactions.
What interest rate is typical for seller financing?
Seller-financed rates are negotiable but typically run 1–3% above current conventional mortgage rates to compensate the seller for taking on credit risk and illiquidity. Rates of 6–9% were common in recent years depending on market conditions and deal structure.

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