Finance category
Mortgage, loan, investing, tax, and money calculators.
Seller Financing vs Bank Loan Calculator
Compare a seller-financed deal (typically amortized like a 30-year but with a 5–7 year balloon) to a standard bank mortgage. See payments, balloon amount, and total cost over the balloon period.
Property & down payment
Bank loan
Seller financing
Bank payment
$2,423/mo
Total over 5 yrs: $154,867
Seller payment
$2,542/mo
Total over 5 yrs (with balloon): $485,467
Balloon payoff
$329,417
due at year 5
Closing cost difference
$6,000
seller usually cheaper
Reading the comparison
Seller financing usually has a slightly higher rate and a balloon, but lower closing costs and faster close. Bank loans cost more upfront but offer 30-year fixed payment certainty without balloon risk.
Use seller financing when bank financing is hard (low income docs, unique property, urgent close), or to negotiate a lower price in exchange for the seller carrying a note. Just make sure you have a credible plan to refinance or pay off before the balloon hits.
How to Use
- Enter purchase price and down payment percentage.
- Enter the bank loan rate, term, and closing costs.
- Enter the seller financing rate, amortization period, balloon date, and (much lower) closing costs.
- Compare monthly payments and total cost over the balloon period.
Frequently Asked Questions
When is seller financing the right call?
When bank financing is hard (low W-2 income, unique property, no recent comps), when timing is urgent, or when the seller wants long-term passive income. Investors use seller financing for non-conforming deals all the time.
What rate do sellers typically charge?
Often slightly above market rate — they're taking on bank-equivalent risk without the bank's underwriting. 0.5–1.5% above conventional rates is common, sometimes higher for higher-risk deals.
What happens at the balloon?
You refinance into a conventional loan or sell the property. If you can't do either (bad credit, value drop, rate environment), the seller can foreclose. Plan multiple exit paths.
Are seller financing terms negotiable?
Very. Rate, term, balloon, prepayment penalties, even down payment are all on the table. The seller's motivation matters — a tax-conscious seller may prefer installment treatment; an investor seller may want passive income for years.
Related Calculators
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Mortgage Calculator
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Refinance Calculator
Plan the refinance to retire the balloon.
Wraparound Mortgage Calculator
More complex seller-financed structure.
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