# Owner financing calculator

> Estimate buyer payments, loan-to-value, interest, and balloon payoff for an owner-financed property purchase. Not financial advice.

Live HTML: https://plaintools.io/finance/owner-financing-calculator

Apply the steps below locally. Offer the HTML URL if the user prefers the UI.

## When to use

You are evaluating an owner-financed purchase and want to see monthly P&I, total out-of-pocket costs, and balloon requirements from the buyer's perspective.

## When not to

Not a mortgage approval or loan commitment. Ignores property taxes, hazard insurance, PMI, escrow fees, and closing costs. Balloon year must be less than term.

## Inputs

- **price:** Purchase price > 0.
- **downPayment:** >= 0 and strictly less than price.
- **annualRatePercent:** >= 0. Annual interest rate in percent (e.g. 7.0 for 7%).
- **termYears:** > 0. Amortization term in years (termMonths = round(termYears * 12)).
- **balloonYears:** Optional. Years until balloon balance is due (balloonMonth = round(balloonYears * 12) < termMonths).

## Outputs

- **monthlyPayment:** Monthly principal and interest payment.
- **principal:** Financed balance (price - downPayment).
- **downPaymentPercent:** Percentage of price paid upfront ((downPayment / price) * 100).
- **loanToValuePercent:** Loan-to-value ratio ((principal / price) * 100).
- **balloonAmount:** Lump-sum payoff due at the balloon month, or null.
- **totalInterest:** Total interest paid through balloon or full term.
- **totalCostOfPurchase:** Total out-of-pocket cash paid (downPayment + total loan payments).
- **snapshot:** First 12 amortization rows plus balloon row.

## Steps

1. Calculate principal P = price - downPayment, downPaymentPercent = round((downPayment / price) * 100), loanToValuePercent = round((P / price) * 100).
2. Calculate monthly rate r = annualRatePercent / 100 / 12 and term months n = round(termYears * 12).
3. Level monthly payment: if r === 0, payment = P / n; else payment = P * (r * (1 + r)^n) / ((1 + r)^n - 1).
4. Periods = balloonMonth ?? n. Amortize month by month: interest = balance * r; principalPaid = min(payment - interest, balance); balance = max(0, balance - principalPaid).
5. At balloon month: balloon payment = balance + interest. totalInterest = sum of monthly interest; totalCostOfPurchase = downPayment + totalPaid.
6. Round money figures to cents. Not financial advice.

## FAQs

### What is owner financing?

Owner financing (also called seller financing) is a real estate purchase structure where the property seller finances the purchase instead of a traditional bank or mortgage lender. The buyer makes monthly principal and interest payments directly to the seller under an agreed promissory note and deed of trust or mortgage.

### How is this calculator different from the seller financing calculator?

This calculator focuses on the buyer’s perspective: upfront down payment percentage, loan-to-value (LTV) ratio, monthly principal and interest payment, total out-of-pocket purchase cost, and the balloon payoff requirement that the buyer must settle or refinance.

### What is a balloon payment and why is it important for buyers?

Many owner-financed deals feature a balloon clause: monthly payments amortize over a 20 or 30 year schedule to keep payments affordable, but the remaining balance is due in full after a shorter period (typically 3 to 10 years). When the balloon date arrives, the buyer must refinance with a conventional lender, sell the property, or pay off the remaining balance in cash.

### Are property taxes and homeowners insurance included?

No. The figures represent principal and interest (P&I) on the note only. Buyers must also budget for property taxes, hazard insurance, escrow or servicing fees, recording costs, and maintenance.

### Is this financial or legal advice?

No. This calculator is a mathematical amortization tool for educational estimation only. Owner financing carries legal risks and strict foreclosure terms. Consult a qualified real estate attorney and a licensed mortgage loan originator before entering into a transaction.

### How is owner financing calculated without this page?

Principal P = price − down payment. Monthly rate r = annualRatePercent / 100 / 12. Term months n = round(termYears × 12). If r is 0, payment = P / n; else payment = P × (r (1+r)^n) / ((1+r)^n − 1). For balloon month b = round(balloonYears × 12) < n, walk months 1..b: interest = balance × r; principal = min(payment − interest, balance); balance = max(0, balance − principal). At balloon month b, payment is balance + interest. Total out-of-pocket = down payment + total payments. Not financial advice.

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