Take over the seller's existing mortgage and keep their rate — see the equity, cash flow, and risk before you make an offer.
Fill in the deal details above and click Calculate to see your subject-to analysis.
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Subject-to is powerful because it lets you take over a low, fixed-rate mortgage without qualifying for new financing — but that power only translates into a good deal when the seller's situation and the property's numbers line up. This calculator exists to test both sides at once: your instant equity pickup at closing, and your ongoing cash flow once you're collecting rent and making the seller's payment.
Your instant equity is the gap between what the property is worth today and what you owe on the existing loan, minus any cash you hand the seller at closing. That equity is real, but it's on paper until you sell or refinance. Your monthly cash flow is what actually pays your bills in the meantime, so don't let a big equity number talk you into a deal with thin or negative cash flow — you still have to carry the property every month between now and your exit.
Say the existing loan balance is $145,000 at a locked-in 3.5% rate, with a $870/month payment. The property is worth $200,000 today, and you pay the seller $5,000 cash at closing plus $3,000 in your own closing costs. Your instant equity pickup is $200,000 − $145,000 − $5,000 = $50,000. If you rent it for $1,500/month and your taxes, insurance, and other expenses run $445/month combined, your total monthly cost is $870 + $445 = $1,315, leaving $185/month in cash flow — on a deal where you invested only $8,000 out of pocket. That's the subject-to math working the way it's supposed to.
Subject-to deals were everywhere during the 2007 crash — sellers who were underwater or behind on payments needed a way out fast, and I watched the investor I worked alongside structure dozens of these deals to keep people out of foreclosure while building his own portfolio. It taught me that the best subject-to deals aren't the ones where you "win" hardest on paper — they're the ones where the seller genuinely needed exactly what you offered.
My rule of thumb: if the instant equity pickup looks too good to be true, slow down and ask why. Usually it's deferred maintenance you haven't priced in yet, or a seller who doesn't fully understand what they're signing. Run this calculator with a conservative rent number and a realistic expense estimate — not the best-case numbers — before you get attached to the deal.
Subject-to (or "sub-to") means purchasing a property subject to the existing mortgage — the buyer takes over the property and makes the mortgage payments, but the loan remains in the original seller's name. The deed transfers to the buyer while the mortgage liability stays with the seller.
Yes, buying subject-to is legal in all 50 states. However, most mortgages contain a due-on-sale clause that technically allows the lender to call the loan due when the property changes ownership. In practice, lenders rarely trigger this clause as long as payments are being made on time.
The due-on-sale clause is a provision in most mortgages that gives the lender the right to demand full repayment of the loan if the property is sold or transferred. In subject-to transactions, investors accept this risk. Lenders historically have not triggered this clause when payments remain current.
Sellers agree to subject-to deals when they need to sell quickly, are facing foreclosure, are behind on payments, need to relocate fast, or cannot sell for enough to pay off the mortgage. Subject-to allows them to walk away from the property and stop making payments without a short sale or foreclosure on their record.