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Michigan land contract calculator

In a land contract the seller finances the sale and keeps the deed until it is paid. Enter the terms to see the payment, the balloon and the schedule, with the Michigan limits that matter to a buyer or a seller.
Show it for
The deal

An example. Most private sellers can charge at most 11% a year, finance charges included.

The schedule

Enter 0 for no balloon.

Monthly payment

$1,448

$1,448.32 a month, principal and interest. Taxes and insurance are not included.

Amount financed
$180,000
Monthly payment
$1,448.32
Paid through month 60
$86,899.20
Of that, interest
$79,483.48
Balloon due, month 60 (year 5)
$172,584.28
$172,584 comes due in one payment at month 60 (year 5). Missing it is a default, so ask how you would pay it before you sign.
By month 60 the buyer has paid 13.7% of the price, counting the down payment. Under 50%, the time to pay after a forfeiture judgment is 90 days, not 6 months (MCL 600.5744).
Transfer tax of $1,720 is due when the deed is recorded, not at signing (MCL 207.526(o), 207.505(m)). Have the contract say who pays it.
Year by year
YearPaidInterestPrincipalBalance
1$17,380$16,150$1,230$178,770
2$17,380$16,035$1,345$177,425
3$17,380$15,909$1,471$175,954
4$17,380$15,771$1,609$174,345
5$17,380$15,620$1,760$172,584
Month by month
Have an agent check these numbers

How we figure it

The payment
The standard loan formula on the price less the down payment, at the rate and over the years you enter. Michigan requires interest on the unpaid balance only, so we figure it month by month, to the cent.
The balloon
What is left of the balance after the last regular payment, due in one payment. Enter 0 for a contract paid off by its regular payments.
The 50% line
We add the down payment to the principal paid and compare it with the price. Under 50 percent, a buyer has 90 days to pay after a forfeiture judgment; at 50 percent or more, 6 months (MCL 600.5744).
What it leaves out
Property taxes, insurance, repairs, and any fee that counts as a finance charge toward the rate limit. Who pays them is whatever the contract says.

A worked example

Example figures, not a quote or a typical deal: a $200,000 price, $20,000 down, 9% interest, payments figured over 30 years, and the balance due in 5.
Monthly payment, principal and interest$1,448.32
Total paid over 5 years$86,899
Part of that going to interest$79,483
Balance due at the end of year 5$172,584
Down payment and principal, as a share of the price13.7%

Questions

What is the maximum interest rate on a land contract in Michigan?

For most private sellers, 11 percent a year, counting all finance charges (MCL 438.31c(6)). The cap applies to sellers who are not federally approved or state or federally regulated lenders.

What is a balloon payment on a land contract?

The rest of the balance, due in one payment. Payments are often figured over 30 years with the balance due much sooner. In our example, a buyer owes $172,584 after 5 years. Missing it is a default, so ask how it would be paid before you sign.

What happens if the buyer defaults on a land contract in Michigan?

If the contract allows forfeiture, the seller serves a notice giving at least 15 days to pay or fix the problem, then goes to court. After a judgment the buyer has 90 days to pay if less than 50 percent of the price has been paid, or 6 months at 50 percent or more. The seller can also foreclose in circuit court.

When is transfer tax paid on a land contract?

When the deed is recorded, not when the contract is signed. Land contracts where title does not pass until the price is paid are exempt until then (MCL 207.526(o), 207.505(m)). Have the contract say who pays.

Do property taxes change after a land contract?

They can. A land contract is a transfer of ownership, so the taxable value uncaps the year after signing, and the assessor must be notified within 45 days (MCL 211.27a). A buyer living in the home can claim the Principal Residence Exemption.

Can a seller finance a home with a balloon?

Often, but federal rules set conditions on seller financing, and they differ by how many properties a seller finances in a year. A balloon can rule out one of the exclusions (12 CFR 1026.36(a)). Ask a Michigan real estate attorney before you offer terms.

Sources

Checked October 31, 2026.

Keep going

Have an agent check these numbers

A Raven agent will go over your figures against your home and your market, and tell you which lines to firm up. Your numbers come with this form.

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Estimate only, not a quote, an offer or a contract. We are real estate brokers, not attorneys, and a land contract is a document worth having a Michigan real estate attorney read before you sign. General information, not legal or tax advice.