A land contract sells property on installments while the seller keeps legal title. Enter the price, down payment, rate, and how long the buyer has paid to see the remaining balance, the buyer equity built up, and how much of it is at risk on a default.
Also called a contract for deed, installment land contract, or agreement for deed depending on the state.
| Contract Price | Down | Rate / Term | Monthly Payment | Months Paid | Remaining Balance | Buyer Equity | Equity % |
|---|---|---|---|---|---|---|---|
| $300,000 | $30,000 | 7.0% / 30y | $1,796 | 60 | $254,155 | $45,845 | 15.3% |
| $250,000 | $25,000 | 6.5% / 30y | $1,422 | 36 | $216,939 | $33,061 | 13.2% |
| $450,000 | $90,000 | 7.5% / 30y | $2,517 | 120 | $312,462 | $137,538 | 30.6% |
| $200,000 | $20,000 | 8.0% / 15y | $1,720 | 60 | $141,779 | $58,221 | 29.1% |
Generated by the calculator's own amortization loop. Note how slowly equity builds on a 30-year contract: after five years and $107,779 of payments the buyer owns just 15.3% of the price, because most of each payment is interest.
A land contract — also called a contract for deed, installment land contract, or agreement for deed — is a sale where the seller keeps legal title until the buyer finishes paying. The buyer gets equitable title and possession immediately, and pays the seller in installments.
This is the crucial difference from a wrap-around or a standard seller-financed mortgage, where the buyer receives deed at closing and the seller holds only a note and lien. With a land contract, the buyer has no deed to record, which is exactly why it is both useful and dangerous.
Because the seller keeps title, a defaulting buyer can lose all accumulated equity in a forfeiture state — the seller keeps the property and every payment made. Some states (notably Minnesota, and others by case law) require the seller to refund equity above a threshold or to foreclose instead, but the rules vary enormously.
This calculator's "Buyer's Equity" line is the number that matters most: it is the amount the buyer stands to lose in a forfeiture. In the first example, five years of on-time payments leaves $45,845 at risk, plus the $30,000 down payment is already gone. That is the real cost of default, and it is far steeper than walking away from a bank mortgage.
This tool answers the question both sides of a land contract actually ask: how much has the buyer really accumulated, and what is the seller's remaining security?
The equity percentage is the single most useful output. Below roughly 20% the buyer has little to lose but also little to show; above 35% a forfeiture is financially catastrophic and the contract should include an equity-credit remedy.
No. In a mortgage the buyer receives the deed at closing and the lender holds a lien. In a land contract the seller keeps the deed and the buyer holds equitable title. That difference controls what happens on default — forfeiture versus foreclosure.
Yes. Most states require the seller to record the contract or a memorandum, give the buyer possession, and follow a statutory default notice. A growing number of states require foreclosure or an equity refund rather than forfeiture.
Often not while the contract is active, because the buyer does not hold legal title. Some lenders allow a refinance at payoff once the deed transfers, which is why the contract should specify how and when the deed will be delivered.
That is a major risk. The seller's lender holds a first lien, and a due-on-sale clause may allow it to call the loan. If the seller cannot pay it off at the end, the buyer may never receive clear title. Always require a title search and evidence of the underlying payoff.
Usually the buyer pays property taxes and insurance even though the seller holds title, but the seller remains legally liable. The contract should say explicitly who pays, how proof of insurance is delivered, and what happens if either party fails.
⚠️ Important Note: State law on land contracts varies enormously, especially on forfeiture, equity refunds, and recording requirements. This calculator performs amortization math only and does not create legal advice. Have a licensed real estate attorney in the property's state review the contract before signing — the forfeiture consequences of a default can be far larger than the equity figures shown here.