A land contract payment is a standard loan payment: on a $100,000 parcel with $20,000 down, 8 percent interest and a 30-year term, it is $587.01 a month. Enter your own price, down payment, interest rate and term in this land contract calculator and it gives you the monthly payment, the balance due at the balloon, and a month-by-month payoff schedule. It uses the same level-payment amortization math a bank uses for a mortgage. Nothing here is specific to any lender; it is just the formula, applied to your numbers.

If you are new to seller financing, start with what a land contract is and come back. If you only want the payment, scroll to the calculator.

How does a land contract payment work?

A land contract payment is a loan payment. The seller finances the price minus the down payment, the buyer pays it back in equal monthly installments, and every installment is part interest and part principal. Early on, almost all of it is interest. Late in the term, almost all of it is principal.

The payment comes from the standard amortization formula, the one printed on any business-math formula sheet (the University of Texas at Arlington's Math 1316 sheet is a clean example):

M = L × [r(1 + r)^n] ÷ [(1 + r)^n − 1]

L is the amount financed (price minus down payment). r is the monthly rate, which is the annual rate divided by 12. n is the total number of payments, which is the term in years times 12. M is the monthly payment.

Here is the default example the calculator opens with. Price $100,000, down payment $20,000, 8% interest, 30-year amortization.

L = $80,000. r = 0.08 ÷ 12 = 0.0066667. n = 360.

M = $80,000 × [0.0066667 × (1.0066667)^360] ÷ [(1.0066667)^360 − 1] = $587.01 per month.

The first payment breaks down like this: interest is $80,000 × 0.0066667 = $533.33, so only $53.68 goes to principal. That is why a 30-year schedule on a $100,000 parcel builds almost no equity in the first few years, and it is the main thing sellers miss when they agree to a long term.

What is a balloon payment on a land contract?

A balloon is the lump sum still owed when the contract ends before the loan is fully paid off. Sellers use it so they are not waiting 30 years for their money. The payment is calculated on a long amortization (say 30 years) so it stays affordable, but the whole remaining balance comes due at a set point (say year 5). The buyer refinances, sells, or pays it from savings.

The balloon balance after k payments is:

B_k = L(1 + r)^k − M × [((1 + r)^k − 1) ÷ r]

Using the same $80,000 at 8% on a 30-year schedule with a 5-year balloon (k = 60):

B_60 = $80,000 × (1.0066667)^60 − $587.01 × [((1.0066667)^60 − 1) ÷ 0.0066667] = $76,055.89 due at month 60.

So over five years the buyer sends $35,220.60 in payments. Only $3,944.11 of that reduces the balance. The other $31,276.58 is interest. That is not a trick; it is what a 30-year amortization at 8% does. It is a good deal for a seller who wants income and a bad deal for a buyer who expected to own a chunk of the land by year five.

A second check, with smaller numbers you might actually see on a rural lot: $50,000 price, $5,000 down, 9%, 20-year amortization, balloon at year 7. L = $45,000, payment $404.88, balloon at month 84 is $37,155.54.

The calculator prints every month in between, so you can see the exact balance at any point, not just the balloon date.

Who pays property taxes and insurance on a land contract?

The buyer, almost always. The contract should say so in writing, and the standard forms do. Michigan Legal Help's land contract overview puts it plainly: the buyer is in charge of repairs and property taxes in most land contracts, and most contracts also require the buyer to carry insurance. The Minnesota Attorney General's contract-for-deed guide says the same thing, that the buyer takes on repairs, property taxes and upkeep once the contract is signed.

That matters for the calculator in one way: the payment it gives you is principal and interest only. Taxes and insurance are on top. Some sellers collect a monthly tax-and-insurance escrow with the payment and pay the county themselves, which is smart on vacant land because an unpaid tax bill can turn into a tax lien against the seller's own title. If you want that, add the yearly tax bill divided by 12 to the payment yourself.

This is general information, not legal advice. A real estate attorney in your state can confirm how it applies to you.

What happens if the buyer stops paying?

This is where land contracts stop being simple math. Each state has its own rules on cancelling or forfeiting the contract, and they change the real risk of the deal more than the interest rate does. Four states where land contracts are common:

Michigan. A seller can only use forfeiture if the contract expressly provides for it (Mich. Comp. Laws § 600.5726). The written notice of forfeiture must give the buyer at least 15 days to pay up and cure any other breach (§ 600.5728). After a forfeiture judgment the buyer still gets 90 days to pay if less than 50% of the price has been paid, or 6 months if 50% or more has been paid (§ 600.5744(4)). The seller can also choose judicial foreclosure in circuit court instead (§ 600.3101). Details, forms and the mechanics are in our Michigan land contract guide.

Minnesota. A contract for deed signed after August 1, 1985 is cancelled by a statutory notice, and the buyer has 60 days from service to cure (Minn. Stat. § 559.21 subd. 2a). To stop the cancellation the buyer pays the default, the costs of service, attorney fees capped by the statute (up to $1,000 for contracts signed after August 1, 2024) and 2% of the amount in default. No court case is needed if the buyer does not cure.

Wisconsin. Wisconsin uses strict foreclosure in court. The judge must set a redemption period of at least 7 working days from the judgment hearing, and the judgment is not final until the court confirms afterward that no redemption happened (Wis. Stat. § 846.30). In practice courts often set longer periods, so plan on a court filing, not a notice in the mail.

Ohio. Forfeiture of a land installment contract can only be enforced 30 days after the default, and the buyer can cure during those 30 days by paying everything currently due (Ohio Rev. Code § 5313.05). Once the buyer has paid for five years or has paid 20% or more of the price, forfeiture is off the table and the seller must foreclose like a mortgage lender (§ 5313.07).

The pattern across all four: the longer the buyer has been paying, the harder it is to take the land back. Run the calculator, look at how much principal has come in by the date your state's protections kick in, and price the risk of carrying a buyer that long.

When a land contract is the wrong tool

Seller financing pays more in total than a cash sale, on paper. You collect interest for years and you set the price. The catch is that you are the bank: you chase late payments, you watch the tax bills, and if it goes bad you spend months in the process above to get back a parcel you already sold once.

If you need the money now, or you do not want a loan on your books, you can sell the land for cash and close in 7 to 21 days instead. The price will be below retail; the trade is speed and certainty. For the normal closing paperwork either way, see our guide to the contract to sell land and what to expect in closing costs when selling land.

For the Minnesota cancellation timeline and the 2 percent cure, see contract for deed in Minnesota.

Once you have the payment schedule, see how the IRS taxes each payment to split it into basis, gain and interest.

Selling in Wisconsin? Budget the 0.3% transfer fee at signing; the Wisconsin land contract guide explains why.

Running numbers for an Ohio parcel? Read the Ohio land contract guide first, because the default rules depend on whether there is a house.

FAQ

How do I calculate a land contract payment? Multiply the amount financed by the monthly rate times (1 + rate)^n, then divide by (1 + rate)^n minus 1, where n is the number of payments. For $80,000 at 8% over 30 years that is $587.01 a month. The calculator above does it for you.

What is a typical balloon on a land contract? There is no legal standard. Sellers commonly amortize over 15 to 30 years and call the balance due somewhere in years 3 to 10. The balloon amount is whatever the schedule shows at that month, so set the balloon year in the calculator and read the balance.

Does the land contract payment include property taxes? No. The payment is principal and interest only. The buyer normally pays taxes and insurance separately, or the seller collects them as an escrow on top of the payment.

Can the seller take the land back if I miss a payment? Not immediately, and not the same way in every state. Michigan requires a 15-day notice then a court judgment with a 90-day or 6-month payoff window; Minnesota gives 60 days after a statutory notice; Ohio gives 30 days and bans forfeiture after 5 years or 20% paid; Wisconsin requires a court foreclosure with a redemption period. Check your state's statute and your contract.