Wrap-Around Mortgage Calculator

About this calculator

In a wrap-around mortgage, a seller who still owes money on their own (“underlying”) home loan finances the sale themselves by writing the buyer a new, larger loan that wraps around — and stays behind — the existing one, rather than requiring the buyer to get a fresh bank mortgage. The seller collects the buyer’s monthly payment on the wrap loan, keeps making the smaller payment on the underlying loan out of that amount, and pockets the difference as their monthly spread.

This structure lets a seller effectively act as the lender — useful when the underlying loan carries a low interest rate that can’t easily be transferred, or when the buyer can’t qualify for conventional financing — and the spread is the seller’s compensation for taking on that lending risk. Real estate investors, seller-financing specialists and creative-finance buyers/sellers use this calculation to see exactly how much monthly income (or shortfall) a proposed wrap deal would produce.