Finance category
Mortgage, loan, investing, tax, and money calculators.
Owner Finance Note Calculator
Structure an owner-financed note: payment, balloon due, total interest paid, and total seller income through balloon date. Works for primary homes, rentals, and land sales with seller-carried financing.
Monthly payment
$2,265
Note amount
$324,000
Balloon due
$297,542
Interest to balloon
$163,841
Total seller receives
$523,841
How the math works
An owner-financed note turns a property sale into a long-term income stream for the seller. Buyer gets flexibility (no bank qualification), seller gets above-bank interest income and potentially installment-sale tax treatment (spreads capital gains over years).
Record a mortgage or deed of trust to protect seller's interest. Use a licensed servicer for payments. Consider partially-amortizing notes (5- to 10-year balloon, 30-year amortization) to keep payments affordable for the buyer.
How to Use
- Enter sale price and buyer down payment.
- Enter note rate (often 1-3% above bank rates).
- Set amortization period (usually 30 years for affordability).
- Set balloon period (5-10 years is common).
Frequently Asked Questions
Installment sale tax treatment?
If reported as installment sale, capital gains are spread over the payments rather than all in year 1. Reduces the current-year tax bill. Consult a CPA — installment sale election has specific rules and may be undone by certain events.
What's the typical down payment?
10-20% is most common. Higher downs reduce seller risk. Zero-down is rare and typically reserved for buyer rehabbers or sellers taking back cash via a wraparound structure.
Can the note be sold later?
Yes — the note itself is a saleable asset. Note buyers (at a discount) provide liquidity. Typical discount: 10-25% of face value depending on seasoning, buyer credit, and LTV.
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