Home›Wraparound Mortgage Calculator

🔀 Wraparound Mortgage Calculator

Calculate wraparound mortgage spread income: the difference between what your buyer pays you and what you pay on the underlying loan. Monthly spread, balloon analysis, and rate comparison.

📍 Property Address (optional)
InputsYour Numbers
Existing Loan (Underneath)
Existing Loan Balance?
$
Existing Interest Rate %?
%
Existing Monthly Payment?
$
Wraparound Note Terms
Wraparound Purchase Price?
$
Wraparound Interest Rate %?
%
Loan Term (years)?
Balloon Payment (years)?
Pro Forma (Higher Rate)
Alternative Wrap Rate %?
%
As-Is AnalysisCurrent
Enter values to see results
Monthly Spread Income
--
you keep
Annual Spread Income
--
per year
Wrap Payment Collected
--
from buyer
Balloon Balance
--
due at balloon date
Wraparound Cash Flow
Wraparound Loan Amount--
Wrap Payment (you collect)--
Underlying Payment (you pay)--
Monthly Spread Income--
Balloon Analysis
Balloon Date (from now)--
Wrap Balance at Balloon--
Underlying Balance at Balloon--
Your Net Equity at Balloon--
Total Spread Income (to balloon)--
Pro FormaAfter Plan
Enter pro forma values
Alt. Rate Spread
--
higher rate model
Extra Annual Income
--
vs current rate
Total Extra (to balloon)
--
rate bump impact
Spread Rate Difference
--
underlying vs wrap
Rate Comparison
Underlying Rate--
Current Wrap Rate--
Alternative Wrap Rate--
Monthly Spread at Alt Rate--

📄 Email My Free Report

Full analysis sent to your inbox instantly.

1
Enter the Underlying Loan
The existing loan balance, rate, and payment. The underlying loan stays in place. You collect payments on the full wrap amount and pass through the underlying payment.
2
Enter Wrap Terms
The wrap note is for the full purchase price at your rate. Buyers pay you; you pay the underlying lender. The rate spread is your profit engine.
3
Set the Balloon
Most wraparounds have a balloon payment in 3-7 years. At balloon, the buyer refinances conventionally, paying off both the wrap note and underlying loan.
4
Read the Spread
Your monthly profit = what you collect minus what you pay on the underlying. A 4.5% underlying rate and 7.0% wrap rate on $195K creates a ~$375/mo spread.
5
Analyze the Balloon
At balloon, check that the buyer's refi loan pays off the wrap note in full. The wrap balance minus underlying balance = your equity position.
6
Know the Legal Risks
Wraparounds require careful legal structuring. The underlying loan's due-on-sale clause may be triggered. Work with a real estate attorney experienced in creative finance.

A wraparound mortgage is a form of seller financing where the seller finances the entire purchase price at a higher interest rate, while the existing mortgage stays in place. The buyer makes one payment to the seller; the seller continues paying the underlying lender. The seller profits from the interest rate spread.


Example: Seller has a $140K loan at 4.5% ($709/mo). They sell for $195K at 7.0%, creating a new payment of $1,297/mo. Spread = $1,297 - $709 = $588/mo. Over a 5-year balloon: $35,280 in spread income plus equity at payoff.


Legal considerations: the underlying loan's due-on-sale clause may allow the lender to call the loan due. In practice, lenders rarely enforce this while payments are being made. But structure wraps with experienced legal counsel.

📄 Email My Report

Full analysis sent free to your inbox.