Use this calculator to check the numbers on a Texas note before anyone signs. It returns the monthly principal and interest payment, the total interest over the life of the loan, the balance left at a balloon date if you set one, and a full amortization table. Everything is calculated in your browser, so the figures you type never leave your computer. After closing, the executed note controls, and a loan servicer applies each payment according to its terms.
How the payment is calculated
A fixed-rate loan that pays itself off in equal monthly installments uses this formula:
M = P × (r × (1 + r)^n) / ((1 + r)^n − 1)
P is the amount borrowed. The monthly rate, r, is the annual rate divided by 12, so a 9% loan uses 0.0075. The number of payments, n, is the term in years times 12. M is the resulting monthly payment. In the early years most of each payment goes to interest; the principal portion grows every month as the balance falls.
Balloon notes
Many private and seller-financed notes are written as balloons. The payment is figured as if the loan ran a long term, often 30 years, but the note comes due much sooner, commonly after 5, 7 or 10 years. Whatever principal is still owed on that date is due in a single payment. To model one here, enter the full amortization term and then the balloon month, counted from the first payment. A 30-year schedule with a 7-year balloon uses month 84.
Balloons keep monthly payments low, but the buyer has to be able to refinance, sell or pay cash when the balance comes due. Run the schedule to see how large that final payment will be before agreeing to it.
Rules the calculator does not check
Texas and federal law limit how certain loans may be structured, and this tool does not apply any of those limits. Three that come up often:
- Texas home equity loans. A loan against a homestead made under Tex. Const. art. XVI, §50(a)(6) must be repaid in substantially equal installments, so a balloon is not allowed. These loans also carry an 80% loan-to-value limit, a cap on fees and a set of required disclosures.
- Ability to repay. For most consumer-purpose loans on a dwelling, federal Regulation Z (12 CFR §1026.43) requires a good-faith judgment that the borrower can repay. Balloon features generally keep a loan out of the Qualified Mortgage category.
- Wraparound loans. Texas regulates residential wrap mortgage loans in Finance Code Chapter 159, which includes disclosure and licensing requirements.
Before you finalize a structure, review it with a Texas real estate attorney and, where one is required, a licensed residential mortgage loan originator.
Calculator questions
What do I enter, and what comes back?
You enter the loan amount, the annual interest rate and the term in years. Two fields are optional: a balloon month and a monthly escrow amount. You get the principal and interest payment, the total payment with escrow added, total interest, total of all payments, the balloon balance if any, and a row for every month of the loan.
What should go in the escrow field?
Add up a year of property taxes, homeowner's insurance and any HOA dues, then divide by 12. The calculator adds that to the principal and interest so you can see the full monthly payment. On a serviced loan with escrow, the servicer reviews that amount each year and adjusts it when taxes or premiums change.
Why does my note's schedule differ slightly from this one?
Small differences usually come from rounding, the first payment date, an odd first period or the way interest is accrued. This tool assumes equal monthly periods. Once the loan closes, the executed note is what counts, so compare its figures against this estimate and ask your attorney about any gap.
Can I use this for a home equity loan on my homestead?
You can calculate a payment, but the tool will not tell you whether the loan meets the §50(a)(6) requirements. It will even let you enter a balloon, which those loans cannot have.
Is the result advice?
No. It is arithmetic on the numbers you supply. It does not tell you whether a loan is legal, affordable or a good investment.
What does servicing cost once the note closes?
Riverstone charges a one-time $150 setup fee, then $35 a month for a Texas note without escrow or $40 a month with escrow. The pricing page has the details.
This page is general information, not legal, tax or financial advice. The calculator estimates payments only and does not test a loan against Texas homestead rules, federal ability-to-repay rules or wraparound requirements. Talk with a Texas attorney and, where required, a licensed loan originator before you set the terms of a loan. Riverstone Note Servicing, LLC is a licensed Texas mortgage servicer and does not make loans.
