Finance category
Mortgage, loan, investing, tax, and money calculators.
Wraparound Cash Flow Calculator
A wraparound mortgage layers a new buyer-to-seller note over the seller's existing mortgage. Buyer pays seller; seller continues paying the underlying loan, pocketing the spread. This calculator models cash flow for both buyer and seller.
Seller's monthly spread
$844
Annual spread
$10,129
Buyer wrap P&I
$1,958
Seller underlying P&I
$1,114
Yield on seller's equity position
12.66%
How the math works
Underlying $200K at 3.75%/22yr: $1,090/mo. Wrap $280K at 7.5%/30yr: $1,957/mo. Seller monthly spread $867. Annual $10,400 on a $80K position = 13% effective yield to seller — way above the ~4% they'd earn on cash.
Buyer pays 7.5% — higher than market conventional — but with lower down payment and no bank qualification. Seller gets strong yield without liquidating equity. Both sides win when structured cleanly; due-on-sale risk is the main downside.
How to Use
- Enter underlying loan balance and P&I payment.
- Enter wrap balance, wrap rate, and term.
- See seller's spread, buyer's payment, and cash flows for each side.
Frequently Asked Questions
How does a wrap work financially?
Underlying mortgage stays with seller. Buyer signs a new note to seller at a higher balance and rate. Buyer's wrap payment > underlying P&I = seller's monthly spread. The higher buyer rate over the lower underlying rate is the seller's profit.
Is wrap different from subject-to?
Yes. Subject-to: buyer takes title, existing loan stays in place, buyer pays underlying payment directly. Wrap: underlying stays, buyer signs new note to seller, seller stays on underlying and passes cash through. Wrap gives seller a profit mechanism; subject-to doesn't.
Due-on-sale risk on wraps?
Yes — same as subject-to. Underlying lender could call the loan if they discover title transfer. Land trust mitigates. Talk to a RE attorney.
When does a wrap make sense?
Seller has low-rate mortgage, buyer can't get conventional financing at current rates. Seller captures the spread; buyer gets into a house they otherwise couldn't. Common in high-interest-rate environments (2023-2025).
Related Calculators
Subject-To Cash Flow Calculator
Subject-to cash flow.
Subject-To vs Seller Financing Calculator
Subject-to vs SF.
Seller Financing Down Payment Calculator
SF down.
Owner Finance Note Value Calculator
Note value.
Pre-Foreclosure Equity Calculator
Pre-foreclosure.
Wholesale Assignment Profit Calculator
Wholesale.
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