How to Calculate Owner Financing Mortgage

If you’re thinking about buying a condo using owner or seller financing then make sure you read this blog post all the way through because it describes how to calculate owner financing mortgage so you can find something that works for you and for the seller.

Most people think that a formula is what they need but we know the information you really need when you ask that question so that’s what we’ve written below…

When you buy a condo the traditional way, you go to the bank and get a mortgage. They give you the money for the condo and you pay the seller.

But not everyone qualifies for a mortgage through the bank, or wants to deal with the process. With owner financing or seller financing, you bypass the bank and instead the seller simply continues owning the condo while you pay the seller your “mortgage” payments (just like you’d pay the bank). And when you’ve paid off the agreed price of the condo, you own it!

As you structure an agreement with the seller, you’ll want to know how to calculate owner financing mortgage, so here’s how to do it:

First, Figure Out the Terms of the Agreement

You’ll need to agree on the terms:

  • Selling price of the property
  • Down payment
  • Interest rate of the loan
  • Length of time that you’ll pay it off
  • Minimum monthly payments
  • Who is responsible for what while you’re living in the condo.

Second, Make Sure It’s a Win/Win

This is the key part of structuring the agreement and calculating it correctly: you need to make sure it’s a win for both you and the seller. Look at the terms and ask yourself the following questions:

  • Is the sale price of the condo fair?
  • Can I afford my monthly payments?
  • Does the seller benefit from the amount of each monthly payment?
  • Will I be able to afford any additional costs (such as repairs) that I am responsible for?

Asking yourself the simple questions will help you know if you’ve calculated affordably. And don’t just think about today; consider your circumstances in the future, too. Will your income increase? What happens if you lose your source of income? What happens if the seller wants the condo back?

Third, Write EVERYTHING Down in an Agreement

Write everything down into a simple contract. It’s always a good idea to have an attorney review the agreement. A few hundred dollars in attorney fees can save you tens of thousands of dollars in hassles, misunderstandings, and even lawsuits in the future.


Seller financing is a great way to buy a condo without having to go to the bank.

These three simple steps will help you figure out how to calculate owner financing mortgage in a way that will work for you and for the seller, both and in the future.

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