Note buying
Note Discount Bid Calculator
The buyer's chair: solve your max bid for a target yield, check the yield the ask actually earns, and read the file the way a desk would, across collateral coverage, lien position, seasoning, and pay history, before you wire anything.
The due date of the first payment that comes to you after settlement. It moves the bid, so it is an input rather than an assumption.
Collateral and risk profile: what a buying desk reads first
Bid up to
$113,455
to earn your 11% effective annual yield (XIRR)
Ask is at or below your max, so there is room to buy
- Payments purchased
- 180 at $1,250.00
- Total collected over life (undiscounted)
- $225,000
- Price per $1 of UPB (at the ask)
- 80.2¢ per $1
- Yield at the ask
- 14.73%
- Bid versus ask gap
- -$18,455
- ITV, price divided by property value (80% line)
- 65.5%
- CLTV, senior debt plus UPB divided by value (90% line)
- 81.7%
Risk-adjusted pricing: a rule-of-thumb rubric
- Suggested yield bandaround your 11% target, widened by the profile below
- 9.00% to 15.00%
- Bid range across the band
- $93,878 to $126,053
How the band moves: it opens around the target yield you entered, so a seasoned, clean first lien with real equity prices near the low end, while junior position, a thin cushion, lates, or sub-performing status push the whole band up. Every point of yield pushes the bid down. The rubric is illustrative rather than engine output; the bid figures it brackets are engine priced. The collateral and seasoning lines it uses are the same ones the NoteHarbor bid worksheet applies in-app.
Price versus yield
What each price would actually earn you on this stream.
| If you pay | Your yield | Versus target |
|---|---|---|
| $87,400 | 16.67% | +5.67% |
| $91,200 | 15.66% | +4.66% |
| $95,000 (anchor) | 14.73% | +3.73% |
| $98,800 | 13.86% | +2.86% |
| $102,600 | 13.05% | +2.05% |
Illustrative educational tool, not financial advice. Yields are effective annual (XIRR) on an Actual/365 basis, the same convention NoteHarbor uses in-app. Real bids also weigh documents, title, servicing history, and state law.
How note buyers price a deal
A note is a stream of future payments, and a buyer pays what that stream is worth at the return they require. Price and yield are two ends of one lever: the seller's ask implies a yield, and your target yield implies a maximum price. This calculator solves both directions with the same present-value engine NoteHarbor uses in-app. Enter the payment, the count remaining, and any balloon, and it prices the stream at your yield.
The bid is only half the file
A real desk reads the collateral and the history before it trusts the schedule: how much property secures the debt (ITV and CLTV), whether the note sits first or behind senior debt, how long the borrower has actually paid (seasoning), and whether the account is performing. Weak spots do not just add caution, they add required yield, which mechanically lowers what you can pay. The risk band here moves the same way, and shows you the bid range across it.
A worked example
Take a note paying $1,250 a month with 180 payments left, with the first payment a month after settlement. At an 11% target yield the stream is worth roughly $113,000 today. If the seller asks $95,000, you are buying below your max, and the ask actually earns you closer to 14.7%. If they ask $120,000, the yield falls short and the calculator shows exactly how far.
Who it is for
Note investors sizing an offer, brokers sanity-checking an ask, and sellers who want to see their note through the buyer's eyes before quoting a price.
Frequently asked questions
How much should I pay for a mortgage note?
Work backwards from the yield you need. The maximum you can pay is the present value of the remaining payments discounted at your target yield: pay less and you earn more, pay more and you earn less. This calculator solves that max bid from the payment, the number of payments left, and any balloon, then checks what the seller's asking price would actually earn you.
What is a discount bid?
Notes usually trade below the balance owed, at a discount, because the buyer wants a return above the note's own rate and takes on collection risk. The discount is the gap between the unpaid balance and the price. Expressed per dollar of balance, say 82 cents per $1 of UPB, it is how buying desks quote the market.
What do ITV and CLTV mean?
ITV, investment to value, is your price divided by the property value, and a low one means the collateral covers your investment with room to spare. CLTV, combined loan to value, is all debt on the property, senior liens plus this note's balance, divided by value. A high CLTV means thin equity behind the debt. This page flags ITV above 80% and CLTV above 90%, the same lines the NoteHarbor bid worksheet applies in-app, so a file that reads clean here reads clean there.
Why do junior liens and unseasoned notes price at higher yields?
A junior lien collects only after the senior is satisfied in a foreclosure, so its risk is higher and buyers demand more yield, typically 2 to 4 points over an equivalent first. Short seasoning means less proof the borrower actually pays; this page flags anything under 6 months, matching the in-app worksheet. Both push the required yield up, which pushes the bid down.
Why does the first payment date change the bid?
You are buying a stream of dated cash flows, and what it is worth today depends on when each one lands. Push the first payment a month further out and every payment behind it shifts too, so the whole stream discounts to less. That is why the date is an input on this page rather than a hidden assumption, and why a real assignment always names the first payment the buyer receives.
What does sub-performing mean for the price?
A sub-performing note, with spotty or recently resumed payments, cannot be priced off the schedule alone. Buyers price it off workout value: what the collateral and a realistic collection path support. Treat any schedule-based figure as a ceiling, not a bid.
Is the risk band an official rating?
No. The suggested yield band is a labeled rule of thumb. It opens around the target yield you entered and widens with the profile you describe: position, history, seasoning, status, and equity. It is a starting point for pricing conversations, not underwriting. The bid figures it brackets, though, are computed with the same engine NoteHarbor uses in-app, and its collateral and seasoning lines are the in-app worksheet's own.
Does the calculator store my numbers?
No. Every figure, including the full price-versus-yield ladder, is computed in your browser and shown for free. Nothing is saved or sent anywhere, there is no email gate, and there is no sign-up.
Run the numbers here. Service the loan in NoteHarbor.
This calculator is scratch math. NoteHarbor keeps the whole note alive, including amortization, payments, escrow, late fees, statements, and tax forms, for every loan you hold or broker, with the exact same engine behind these numbers.
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These calculators are provided for educational and planning purposes only. They are estimates, not financial, tax, or legal advice, and not an offer to buy or sell anything. Figures assume on-time payments and the inputs you enter; your actual loan or transaction may differ.