Mortgage Note Value Calculator
Buying or selling a seller-financed note? The value of a note is the present value of its remaining payments (plus any balloon) discounted at the buyer's required yield. Enter the payment stream to see the price and discount.
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Results
Price to pay at target yield
$113,987.08
To earn 10% on this note, pay about $113,987.08, a 12.3% discount to the balance.
| Discount to balance | $16,012.92 |
|---|---|
| Discount (% of balance) | 12.32% |
| Total remaining cash flow | $264,000.00 |
Estimate only. Not legal or financial advice.
How this calculator works
Each future payment is worth less today. The calculator discounts every monthly payment, and the balloon if any, at your target yield divided by 12.
If your target yield is higher than the note's interest rate, the price will be below the unpaid balance. That difference is the discount.
Formulas
Price = PMT × (1 − (1 + y)^−n) ÷ y + balloon ÷ (1 + y)^n, where y = yield ÷ 12Discount = balance − price Assumptions & limits
- Payments are assumed to be made on time every month. Real note pricing also considers payer credit, equity (LTV), seasoning, property condition and paperwork quality.
- The balloon is assumed to be paid together with the final scheduled payment.
Assumptions last reviewed 2026-10-18.
Disclaimer: This calculator provides estimates for educational purposes only and is not legal, tax, lending or financial advice. Results depend on your inputs and simplifying assumptions. Confirm with a qualified lender, attorney, CPA or title/escrow professional before making decisions.
Frequently asked questions
How are mortgage notes priced?
Investors price notes by discounting the remaining payments at their required yield. Riskier notes (low equity, short payment history, weak documentation) demand higher yields, which means lower prices.
Can I sell part of a note?
Yes. Many buyers purchase a set number of payments (a partial). Enter only the payments being sold and set the balloon to 0 to estimate a partial's price.
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