Use this calculator to see what an owner-financed purchase would cost each month, how much interest you would pay before the balloon date, and what balance would be left to refinance or pay off. Enter any price, down payment, interest rate, amortization and balloon year; the results and the year-by-year table update as you type. The starting figures are only an example.
| Year | Payments | Interest | Principal | Balance at year end |
|---|
How it works
An owner-financed sale in Puerto Rico usually works like a bank mortgage written by the seller. The buyer pays a down payment at closing, signs a mortgage note to the seller for the rest, and makes monthly payments of principal and interest. The mortgage is executed before a Puerto Rico notary and recorded in the Property Registry, which is what secures the seller. Because sellers rarely want to be lenders for thirty years, the payments are often calculated as if the loan ran for a long period (the amortization) while the remaining balance comes due much sooner (the balloon), giving the buyer time to refinance with a bank or pay off the balance from other funds.
The calculator uses the standard amortization formula: the monthly payment is the amount financed times the monthly rate, divided by one minus (1 + monthly rate) to the power of minus the number of months. Each month the interest is the balance times the monthly rate, and the rest of the payment reduces principal. The table totals those monthly amounts by year up to the balloon year, and the balloon balance is what is still owed at that point. With a 0 percent rate the payment is simply the amount financed divided by the number of months.
What it leaves out: property tax and insurance (normally paid by the buyer outside the note), closing costs, any interest-only period, late fees and prepayment terms. All of those are negotiated in the note and the mortgage deed. For how these deals are structured and enforced, see Owner financing in Puerto Rico, and for the related rent-first structure see Lease with option to buy.
About the example figures
The calculator opens with a $2,375,000 price and 20 percent down purely as an illustration, which happens to be the asking price of the Cayey estate described on this site: about 100 acres (roughly 103 cuerdas) with a remodeled residence, reduced from $2,500,000 and paying about $990 a year in property tax. Its owners do offer owner financing, along with a furnished long-term lease at $15,000 a month and a lease with option to buy, but the rate and terms shown here are not an offer; actual terms are negotiated. See the main page, or ask about terms.
Frequently asked questions
What is a balloon payment?
How is the monthly payment calculated?
What interest rate do sellers charge on owner financing?
Why does the balance at the balloon date seem so high?
Does the calculator include taxes and insurance?
Sources and further reading
- What is a balloon loan?, Consumer Financial Protection Bureau.
- What is amortization?, Consumer Financial Protection Bureau.
- What is a lien?, Consumer Financial Protection Bureau.
This calculator gives estimates for illustration only and is not a loan offer or financial, legal or tax advice. Actual payments depend on the terms of the note and mortgage, which should be drafted or reviewed by a Puerto Rico attorney. Information about the Cayey estate is provided by the owner and should be independently verified.