Owner financing
Seller Financing Calculator: Carryback Structurer
Set the sale, then hold three financing structures side by side with rate, amortization, and balloon traded off against each other, and see monthly payment, lifetime interest, and the balloon due for each. It is how a seller decides how to carry, not just whether to.
The sale
Financed carryback: $242,000
$33,000.00
Scenario A
Higher rate, 5 yr balloon
- Monthly payment
- $2,255.76
- Balance before the final payment
- $216,563
- Final payment at 5 yr
- $218,277.76
- Total collected
- $351,368
- Interest earned
- $109,368
Scenario B
Balanced, 20 yr
- Monthly payment
- $2,024.18
- Final payment (no. 240)
- $2,027.09
- Total collected
- $485,806
- Interest earned
- $243,806
Scenario C
Buyer friendly, 30 yr
- Monthly payment
- $1,610.03
- Final payment (no. 360)
- $1,612.63
- Total collected
- $579,613
- Interest earned
- $337,613
Side by side
Every row reconciles: the monthly payment times one fewer than the payment count, plus the final payment, equals the total collected.
| Scenario | Monthly | Payments | Final payment | Interest |
|---|---|---|---|---|
| A: Higher rate, 5 yr balloon | $2,255.76 | 60 | $218,277.76 | $109,368 |
| B: Balanced, 20 yr | $2,024.18 | 240 | $2,027.09 | $243,806 |
| C: Buyer friendly, 30 yr | $1,610.03 | 360 | $1,612.63 | $337,613 |
Illustrative educational tool, not financial advice. Structuring seller financing carries legal and tax consequences, including state usury caps, Dodd-Frank ability-to-repay rules, and installment-sale treatment under IRC section 453. Talk to a professional before you carry.
Deciding how to carry, not just whether to
Once a seller decides to offer financing, the real negotiation is the structure. The buyer wants a payment they can afford; you want yield and your capital back on a timeline you can live with. Rate, amortization length, and a balloon are the three levers, and every combination lands differently on both sides of the table. Set the sale price and down payment once, then bend each scenario until the trade-offs are visible.
Reading the three cards
Each card is a complete engine-built schedule of the carried note. Monthly payment is what the buyer sends every month up to the last one. Balance before the final payment is the principal still standing going into that last due date. Final payment is what the buyer actually wires on it: that balance plus the interest for the final period. Those are two different numbers, and treating one as the other is the classic balloon mistake, so the card shows both. Total collected sums every scheduled payment, and interest earned is the part of that above the principal you financed. The flags mark the structure earning the most interest and the one with the top monthly cash flow.
The arithmetic reconciles, and you can check it
The monthly payment times one fewer than the payment count, plus the final payment, equals the total collected. A card that reported only the outstanding balance would not add up, because the final due date carries that period's interest as well as the principal.
A worked example
Sell at $275,000 with 12% down and you carry $242,000. At 9.5% on a 20-year amortization with a 5-year balloon, the buyer pays about $2,255 a month for 59 months. On the 60th, the $216,563 still standing comes due along with that month's interest, making the final payment $218,277.76. Drop to 7% on a straight 30-year and the payment falls near $1,610, but the note runs three decades and the interest adds up accordingly. Neither one is right; they are different products, and this page makes the difference concrete.
Who it is for
Property sellers weighing owner financing, investors structuring wrap or subject-to exits, and agents who want to show a seller what carrying paper actually pays.
Frequently asked questions
What is a seller carryback?
When you sell a property and finance part of the price yourself, you carry back a note: the buyer pays you a down payment plus monthly payments with interest, secured by the property. You become the lender, collecting interest income instead of walking away with one lump sum.
How do rate, term, and balloon trade off against each other?
A higher rate earns more per month. A longer amortization lowers the buyer's payment but stretches your money out. A balloon keeps the payment low while returning your capital early in one lump sum. Most carryback negotiations are exactly this three-way trade, which is why this calculator holds three structures side by side.
What is a balloon payment?
The loan amortizes as if it ran the full term, but at the balloon date the entire remaining balance comes due at once. A 20-year amortization with a 5-year balloon keeps payments at the 20-year level, then the buyer refinances or pays the balance in full on the final due date. Watch the distinction: the cheque on that date is the outstanding balance PLUS the final period's interest, which is why this calculator shows the balance and the final payment as separate lines.
Which structure earns the most interest?
Generally the longest-running one at the highest rate, because interest accrues on a balance that stays outstanding. A balloon cuts the earning window short, so it usually earns less total interest even at a higher rate. The calculator flags the top-interest structure and the top-cash-flow structure so you can see the trade instantly.
What are the tax consequences of carrying a note?
Seller financing is usually an installment sale under IRC section 453: you spread the capital gain across the years you collect principal, while interest is ordinary income as received. Balloons concentrate gain into the balloon year. This calculator does not compute taxes, so talk to a CPA about your basis and gain before you pick a structure.
Are there legal limits on how I can structure it?
Yes. State usury caps limit the rate, owner-occupant buyers can bring Dodd-Frank ability-to-repay rules into play, and some states regulate balloons on residential deals. Structure with a professional; this tool is for exploring the arithmetic, not the law.
Does the calculator store my numbers?
No. All three structures, including the side-by-side summary, are 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.