Subject To Deal Calculator

Subject-to deals leave existing financing in place, often at below-market rates.

Purchase price

Existing loan balance

Existing rate %

Market rate %

Remaining term years

Cash to seller

Lifetime rate savings

$154,617

Monthly payment savings

$515

Total cash to close

$70,000

How the math works

Savings = (market payment − existing payment). Lifetime = monthly × n.

$250k 3.5% vs 7% on 25y: $1,252 vs $1,767 = $515/mo × 300 = $154,500 lifetime rate savings.

How to Use

Enter purchase price.
Enter existing loan balance.
Enter existing rate %.
Enter market rate %.
Enter remaining term years.
Enter cash to seller.
Read lifetime rate savings.

Frequently Asked Questions

Subject-to mechanics?

Seller deeds property to buyer; loan stays in seller's name. Buyer makes mortgage payments. Below-market rate (e.g., 3% during 7%+ environment) = major value. Risks: due-on-sale clause violation (lender can call note), seller liability if buyer defaults. Mitigation: keep payments current, hold in trust (Garn-St Germain exempt), avoid HOA notice, monthly payment auto-debit. Best for: distressed sellers needing fast close, low-rate assumable financing situations. Required: trust setup, attorney, careful due diligence on seller financials.

How does this debt analysis fit a workout strategy?

Workout, default, and recapitalization decisions depend on the gap between in-place debt and current asset value. Lenders evaluate cure cost, foreclosure timeline + cost, broker price opinion (BPO), and borrower equity. Borrowers evaluate equity in the property, refinance feasibility, and forbearance economics. This calculator provides one input to that multi-factor decision.

Discounted payoff (DPO) vs forbearance vs deed in lieu?

DPO: lender accepts less than full balance to avoid foreclosure cost, common with non-recourse and underwater assets. Forbearance: payment deferral 6–18 months, balance accrues, useful when value will recover. Deed in lieu: borrower transfers title to lender, faster than foreclosure but lender takes full risk. DPO often best when borrower has new capital + lender wants quick exit.

Special servicing dynamics?

CMBS loans transfer to special servicer at default or maturity default. Special servicer compensation aligns with workout, but timeline is 6–24 months and fees stack ($25–250k+ in costs). Whole-loan and balance-sheet lenders move faster but with less flexibility. Bridge and debt fund lenders most flexible. Time-to-resolution and total friction cost should be weighted in any borrower scenario.