How to use this calculator
- Enter the agreed sale price and the buyer's down payment.
- Enter the interest rate written into the promissory note.
- Choose the amortization term used to calculate payments (often 15–30 years).
- If the note requires early payoff, enter the balloon year; otherwise leave it at 0.
- Review the payment, interest and balloon, then open the yearly schedule.
Worked example
A property sells for $80,000.00 with $16,000.00 down, so $64,000.00 is financed at 8.5% over 15 years. The buyer pays $630.23 per month. Total interest is $49,442.00.
These are the default inputs above, so you can follow along.
The formula
The monthly payment uses the standard amortization formula:
M = P × r / (1 − (1 + r)−n)
where P is the amount financed (price minus down payment), r is the annual rate divided by 12, and n is the number of monthly payments (years × 12). At 0% interest the payment is simply P ÷ n. If you set a balloon year, the balloon equals the remaining balance after that many payments: B = P(1 + r)k − M[(1 + r)k − 1] / r.
Frequently asked questions
Why are land loan rates higher?
Vacant land produces no income and is harder to resell than a house, so lenders see it as riskier and typically charge higher rates and shorter terms.
How much down do I need for land?
Bank land loans often require 20–50% down. Seller-financed land deals can be more flexible, which is one reason they are popular.
Is owner financing common for land?
Yes. Many rural and recreational parcels are sold with owner financing, often through a land contract or a note and deed of trust.
Should I include property tax?
This calculator shows principal and interest only. Use the land contract calculator to add annual tax and insurance to the monthly payment.
What should I check before buying land?
Typical due diligence includes access and easements, zoning, utilities, perc tests for septic, flood zones and a title search.