Finance category
Mortgage, loan, investing, tax, and money calculators.
Seller Carryback Economics Calculator
Seller carrybacks trade cash for yield. This calculator compares.
Total expected proceeds
$8,892,500
Total interest income
$892,500
Effective yield on note %
8.50%
How the math works
Interest income approximated at note × rate × term × 0.6 (weighted for amortization). Total = cash + note + interest.
Seller carrybacks work best when the seller wants yield and has tax-efficient motivation (installment sale spreads gain). Pure liquidity sellers should avoid carrybacks — the yield above market deposit rates rarely compensates for tied-up capital and default risk compared to a clean cash close.
How to Use
- Enter sale price.
- Enter cash at close.
- Enter seller note amount.
- Enter note rate %.
- Enter note term years.
- Read yield and expected proceeds.
Frequently Asked Questions
Typical terms?
Note 10-40% of sale price. Rate 100-300 bps above conforming. Term 3-10 years typical, some 15-30 amortization with balloon. Secured by 2nd position mortgage (or similar) on asset. Buyer gets better cash financing when seller carries subordinate.
Seller benefits?
Higher effective sale price. Installment-sale tax treatment (spread gain across years). Yield above bank rate. Continued relationship with asset via collateral. Each offsets cash received reduction at closing.
Risks?
Buyer default: foreclose on carryback. Behind senior lien typically. Recovery rate lower than 1st position debt. Price concessions to buyer for carry: 1-5% below cash offer typically. Balance yield vs risk carefully.
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