Finance category

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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.

Underlying loan balance

Underlying rate

Underlying months remaining

Wrap balance to buyer

Wrap rate to buyer

Wrap term months

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.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Wraparound Cash Flow Calculator is built to give a quick, browser-based estimate for wraparound cash flow. 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. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the wraparound cash flow result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this wraparound cash flow estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

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).