Seller financing lets a buyer pay part of a property’s purchase price over time to the seller. This guide explains DealYield’s narrow payment model: one US/USD purchase, a cash down payment, and one fixed-rate seller note for the remaining price. It does not model a financing stack or decide whether particular terms are permissible.
Use the Seller Financing Calculator to change five inputs and see the monthly payment, remaining principal at maturity, and total modeled payments. The versioned methodology records the assumptions behind seller-financing@1.0.0.
Start with price, cash down and note principal
The model’s funding equation is purchase price = cash down payment + seller-note principal. A $300,000 price and $60,000 cash down payment leave a $240,000 seller note. Principal is derived from those two inputs; entering a separate principal would create a competing funding assumption.
Purchase price must be positive. Cash down payment can be zero, but must be less than price. Both accept cents. These validation limits describe the calculator’s supported arithmetic, not terms that a seller must accept or that a buyer should choose.
Cash down payment is only one part of the buyer’s possible cash obligations. Closing costs, taxes, insurance, property expenses and fees are excluded. Use Closing Costs for a separate itemized estimate; do not treat the down-payment result here as total closing cash. Seller obligations and existing debt payoffs are also outside this note model.
Interest, amortization and maturity do different jobs
The fixed annual interest rate sets the monthly rate: annual rate divided by 12. Enter a percentage with at most two decimal places, equivalent to whole basis points. The supported range is 0–100%; it is a numerical boundary, not a recommendation or legal rate limit.
The amortization period sets the regular payment size. Maturity sets when any unpaid principal becomes due. Both are entered in whole months, with 1–600 months for amortization and maturity no later than amortization. For example, 360-month amortization means a 30-year payment horizon; 60-month maturity means the note must be repaid after five years.
Payments occur monthly in arrears, starting one month after origination. The model assumes the full note begins at origination and every scheduled payment is made on time. There are no dates, daily accrual conventions, missed-payment charges or payment modifications.
For principal P, monthly rate r and amortization A, payment is P × r / (1 − (1+r)^(-A)). At a zero rate it is simply P / A. If maturity T equals A, scheduled payments fully repay principal. If T is shorter, a balance remains after the final regular payment.
Balloon principal versus the final cash payment
The CFPB’s balloon explanation describes a large payment at the end of a loan term and explains the repayment risk. DealYield distinguishes two amounts so the last regular installment is not overlooked:
- Balloon principal: the unpaid principal immediately after regular payment T.
- Final maturity cash: regular payment T plus that balloon principal.
The chart’s solid line follows remaining principal after regular payments. Its dashed final drop represents the separate balloon repayment. The schedule includes origination, annual checkpoints, maturity before balloon payoff, and the separate principal repayment. At full amortization, the final balloon row is zero; the last regular payment still occurs.
Worked example: 360-month amortization, 60-month maturity
Enter $300,000 purchase price, $60,000 cash down payment, 6% annual interest, 360-month amortization and 60-month maturity. These are editable examples, not recommended financing terms.
| Measure | Amount |
|---|---|
| Seller-note principal | $240,000.00 |
| Monthly principal and interest | $1,438.92 |
| Regular payments through month 60 | $86,335.28 |
| Balloon after payment 60 | $223,330.46 |
| Final maturity cash | $224,769.38 |
| Principal repaid through regular payments | $16,669.54 |
| Interest through maturity | $69,665.73 |
| Total note payments including balloon | $309,665.73 |
| Total modeled purchase payments including down payment | $369,665.73 |
The regular payment alone does not describe the maturity obligation: most original principal remains due at month 60. Total note payments include all 60 regular payments and the separate balloon. Add cash down payment once to get total modeled purchase payments. Do not add final maturity cash to the regular-payment total: payment 60 is already in that total.
Intermediate calculations stay unrounded. Money rounds half-up to cents only at output. Multiplying $1,438.92 by 60 does not reproduce the unrounded payment total. Likewise, adding the displayed regular-payment total and balloon produces a one-cent difference from the independently rounded total note payments. The engine uses full precision for each total.
Zero interest and full amortization
For a $120,000 price, $20,000 cash down payment, zero interest, 120-month amortization and 24-month maturity, principal is $100,000 and the displayed monthly payment is $833.33. The unrounded regular-payment total through month 24 is $20,000, leaving an $80,000 balloon. Final maturity cash is $80,833.33. Interest is $0, total note payments are $100,000, and total modeled purchase payments are $120,000.
Keep the same inputs but set maturity to 120 months: balloon and interest are both $0. Final maturity cash is just the $833.33 displayed regular payment, while total note payments remain $100,000. Multiplying the rounded payment by 120 would lose forty cents. A real payment schedule may apply its own cent adjustments; this calculator is an unrounded educational estimate, not a note-servicing ledger.
Read totals as gross payments, not profit
Principal repaid through regular payments equals original principal minus the balloon. Interest through maturity equals the regular-payment total minus that principal repayment. Total modeled purchase payments equal purchase price plus modeled interest.
From the buyer’s perspective, this is a limited schedule of purchase and note cash obligations. From the seller’s perspective, the same modeled amounts describe gross receipts only if the buyer actually pays them. The calculator does not subtract seller debt, selling expenses, obligations or taxes. It does not calculate profit, net proceeds, investment return, APR, IRR or installment-sale tax treatment, and it cannot guarantee receipts.
The rate-sensitivity view reruns the same engine at the base rate minus 1 and 0.5 percentage points, the base rate, and plus 0.5 and 1 percentage points. Price, down payment and both durations stay fixed. Rows outside 0–100% are omitted. Compare monthly payment, balloon and interest together; these scenarios neither recommend a rate nor predict refinancing.
Repayment and refinancing risk
The unpaid principal must be repaid at maturity. The CFPB warns that refinancing may be unavailable if property value or the borrower’s finances deteriorate, and failure to pay can put the property at risk. A planned sale is also an uncertain source of repayment. Neither future proceeds nor replacement financing is modeled or guaranteed here.
The model assumes on-time payments throughout. It does not forecast default, enforce a note, determine remedies, generate legal documents or assess eligibility. A supported numerical input does not establish that the proposed financing terms are legally permissible.
Structures this calculator does not model
Multiple notes require separate balances, rates and repayment timing, so this five-input calculation cannot represent them. It also excludes first/second-lien stacks and wraparound financing: there is no underlying-loan payment stream or seller-debt reconciliation. Do not enter a blended principal or rate and assume those structures have been modeled.
Contract-for-deed arrangements are also excluded. The CFPB explains that a contract for deed retains legal title with the seller until payments are completed. This calculator has no title-transfer or contractual-remedy model. A similar monthly amount would not make those arrangements equivalent to the single seller note described here.
Interest-only periods, extra or custom payments, changing rates, financed fees and points are outside the model. Stored seller-note IO, points or fees remain preserved and receive an unsupported-terms notice; their effects are excluded from the displayed estimate.
Use the shared workspace without mixing loan roles
Opening the calculator shows useful defaults without saving them. Use example explicitly saves the example; valid edits save according to the existing workspace rules. Price and cash down payment use the shared acquisition fields. Seller-note terms use the separate seller-note role, never the acquisition, permanent, refinance, bridge or construction role.
If saved price, down payment and seller-note principal disagree, the calculator explains the conflict. An explicit price or down-payment correction can reconcile principal; editing only the rate cannot. Conflicting maturity and balloon months similarly require an explicit maturity edit. Opening the page does not repair either conflict or overwrite populated values with defaults.
The Mortgage calculator models a standard amortizing acquisition loan. Commercial Loan supports a separate acquisition-loan maturity and initial interest-only phases. Neither automatically includes the seller note, and the same limitation applies to Rental ROI and DSCR. Shared price and down-payment edits can still affect tools that legitimately consume those fields.
For collateral arithmetic, LTV relates its modeled loan to the selected value basis; it does not automatically substitute seller-note principal. Maximum Loan uses its own sizing assumptions and does not size or aggregate this seller note. Keep those compatibility limits in mind when moving between tools.
Share links carry only the five resolved calculator inputs in a URL fragment. Shared views are unsaved previews and do not replace the recipient’s scenario. Reports recalculate locally with the same formula version, assumptions, schedule and sensitivity, and can be printed in the browser. Scenario JSON exports contain saved inputs, not calculated results.