Free financing comparison
Seller Financing vs Bank Loan Calculator
Put the seller terms next to the bank quote and quantify the difference. Compare monthly payment, cash required, interest, remaining balance, and what the financing terms are actually worth.
Live comparison
Same property. Two ways to finance it.
Enter the actual seller terms and the bank quote you are comparing. The math updates around the same purchase price.
Bank financing fees are optional lender/origination costs you enter. Transaction-specific closing costs are not assumed.
Bottom line
Seller financing uses $57,500 less cash at closing and saves $313/month compared with the bank quote.
Seller finance · bank $2,728.71
Seller finance · bank $107,500
Seller finance · bank $141,237
Estimated balance in year 5
Seller payment vs bank payment.
Through the seller balloon horizon.
Seller terms support +$58,308 vs entered price at the bank payment.
At the bank's $2,729/month payment, the seller-finance rate and amortization could support about $558,308 of purchase price with the entered seller cash down.
That is financing capacity, not an appraisal or a recommendation to pay that price.
Take these seller terms into the full Deal Lab.
Open the seller-financed structure with the purchase price, down payment, rate, amortization, and balloon already loaded.
Compare the structure, not just the rate
A bank quote and a seller-finance offer can look similar while producing very different economics.
A financing comparison is more than asking which option has the lower interest rate. Down payment, amortization, lender fees, monthly debt service, and a seller-finance balloon can all change how much cash the buyer needs and what the deal costs over time.
This calculator keeps the purchase price fixed and lets you enter the terms for each financing path. That makes the tradeoff visible in dollars instead of reducing the decision to one headline rate.
Seller financing: $50,000 down · 5% · 30-year amortization · 5-year balloon
Bank loan: $100,000 down · 7.25% · 30-year amortization · $7,500 financing fees
The calculator shows how those assumptions change monthly payment, cash required at closing, interest through year five, the seller balloon, and the purchase price the seller terms could support at the bank payment.
Monthly payment is only one part of the comparison.
A lower monthly payment can protect property cash flow, but it does not automatically mean the financing is cheaper in every sense. A seller note with a long amortization and short balloon may create a lower scheduled payment while leaving a large remaining principal balance due in a few years.
That is why the comparison shows both the regular payment and the remaining balance at the seller balloon horizon.
Cash to close can be as important as interest rate.
Traditional bank financing may require more cash down, and some loans also carry financing-specific points or origination fees. Seller financing can sometimes use a different down payment because the terms are negotiated directly between the parties.
The calculator separates the two cash requirements. For the bank side, you can add known lender financing fees. It does not invent title, tax, legal, insurance, appraisal, or other transaction-specific costs.
Compare interest over the same period.
If the seller note has a five-year balloon, comparing thirty years of bank interest against only five years of seller-note interest would be misleading. The tool instead measures interest on both structures through the same horizon: the seller balloon year.
That gives you an apples-to-apples view of the financing cost before the seller payoff becomes due.
What is the seller-finance rate actually worth?
This is where the comparison becomes especially useful in a negotiation. Suppose the bank payment is the amount the property could already support. If the seller offers a lower rate or longer amortization, that same monthly payment can support more principal.
The calculator converts that financing concession into purchase-price capacity using present-value math. It answers a concrete question:
“At the bank payment, how much purchase price could these seller terms support?”
That figure is not a recommendation to pay more and it is not market value. It shows the mathematical buying power created by the financing terms.
The balloon is a different tradeoff from the amortization.
Amortization controls how the regular principal-and-interest payment is calculated. The balloon controls when the remaining balance must be paid off. A seller can offer a 30-year amortization but still require the unpaid balance in year five.
If you want to see the payoff mechanics in detail, use the 30-year amortization with a 5-year balloon example.
If the bank payment is too high, solve the seller terms backward.
Sometimes the real question is not “which loan is cheaper?” It is “what seller-finance price can this monthly payment support?” In that case, use the Reverse Seller Financing Calculator to start from the desired payment and solve for principal and purchase price.
If you also need the property to preserve a minimum amount of cash flow, the Seller Financing Deal Solver can search many rate, amortization, balloon, down-payment, and interest-only combinations automatically.
Use the comparison as a negotiating framework.
Instead of arguing that seller financing is “better” or that a bank is “cheaper,” put both offers on the same screen. Then the parties can see which variable is creating the difference.
A negotiation might sound like:
“The bank requires more cash and the payment is higher. If we keep your price but use these seller terms, the property has more room each month. If you need a higher rate, we can see exactly what that does to the payment and price capacity.”
The calculator does not decide which financing path either party should choose. It makes the tradeoffs measurable.
FAQ
Seller financing vs bank loan questions
How do I compare seller financing with a bank loan?+
Compare the same purchase price using the actual down payment, interest rate, amortization, fees, and balloon terms for each option. The most useful outputs are monthly payment, cash required at closing, interest paid over the same time period, and the remaining loan balance.
Is seller financing always cheaper than a bank loan?+
No. Seller financing can have a lower or higher rate, different down payment, different amortization, and a balloon. The comparison depends on the terms entered. A lower seller rate or smaller cash requirement can improve buyer economics, but every deal is different.
How does a seller-finance balloon affect the comparison?+
A balloon means the remaining seller-financed balance becomes due before the full amortization schedule ends. The monthly payment may still be calculated on a longer amortization period, so the payment can be lower even though a large payoff is due at the balloon date.
What does seller-finance buying power mean?+
Buying power is the purchase price that the seller-finance rate and amortization could support at the same monthly payment as the bank quote, using the entered seller cash down. It is financing capacity, not a property appraisal.
Should bank fees be included?+
If you know lender points, origination fees, or other financing-specific bank charges, enter them to compare cash required at closing. Transaction-specific title, legal, appraisal, tax, insurance, and other closing costs are not automatically assumed by this calculator.