Seller Financing Calculator
Calculate the monthly payment for a seller-financed (owner-financed) property or business sale, using standard loan amortization math.
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This is the fixed monthly payment that fully amortizes the loan (principal + interest) over the given term at the given rate.
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How Seller Financing Payments Are Calculated
In a seller-financed deal, the seller acts as the lender — the buyer makes a down payment and pays the remaining balance to the seller over time, with interest, using the same amortization math as a traditional mortgage or loan.
How to Calculate the Monthly Payment
The standard loan amortization formula converts a principal balance, interest rate, and term into a fixed monthly payment.
Seller Financing Calculator Formula
- Monthly Rate = Annual Interest Rate ÷ 12
- Number of Payments = Term in Years × 12
- Monthly Payment = Principal × [Monthly Rate × (1+Monthly Rate)^N] ÷ [(1+Monthly Rate)^N − 1]
What Interest Rate Is Typical for Seller Financing?
Seller-financed deals often carry rates somewhat above conventional mortgage rates, reflecting the added risk the seller takes on as an unconventional lender — but the specific rate is negotiated between buyer and seller, not set by a standard formula.
Seller Financing Payment Examples
Mid-size deal: $200,000 financed balance, 6% annual interest, 15-year term. Monthly payment ≈ $1,687.71.
Common Seller Financing Mistakes
Not accounting for a balloon payment — many seller-financing agreements amortize over a longer period (e.g. 30 years) but require the full remaining balance at an earlier date (e.g. 5-7 years), which this simple monthly-payment calculation doesn't capture on its own. Confusing the interest rate with the total cost of financing — total interest paid over the loan term can be substantial and is worth calculating separately. Not documenting the agreement with a proper promissory note and security instrument — informal seller financing carries real legal risk for both parties without proper paperwork.
How to Use This Calculator
Enter the loan (financed) amount, the annual interest rate, and the loan term in years.
Formula & Methodology
Uses the standard amortizing loan payment formula: Payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate, and n is the total number of monthly payments.
Example: $200,000 at 7% for 20 years
Monthly rate = 7%/12 ≈ 0.5833%. n = 240 payments. Monthly payment ≈ $1,550.60.
Assumes a fully amortizing, fixed-rate loan with equal monthly payments. Does not account for balloon payments, interest-only periods, closing costs, or a down payment — enter only the actual financed amount.
For estimation purposes only — not a substitute for a real estate attorney or financial advisor when structuring an actual seller-financing agreement.
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Frequently Asked Questions
- How is a seller-financed monthly payment calculated?
- The same way as a standard amortizing loan: using the loan amount, monthly interest rate, and number of payments in the standard mortgage-style payment formula.
- Does this include a down payment?
- No — enter only the amount actually being financed (purchase price minus any down payment) as the loan amount.
- Can I calculate a balloon payment with this?
- Not directly — this calculates a fully amortizing payment over the full term. For a balloon structure, consult a real estate attorney to structure the specific terms.
Last updated 7/22/2026