Land Contract vs Mortgage Calculator
Land contracts let a buyer who can't get conventional financing buy direct from the seller, with title transferring only after final payment. This compares total cost, default risk, and break-even vs a traditional mortgage path.
| Loan amount | — |
| Land contract monthly | — |
| Mortgage monthly | — |
| Land contract total cost | — |
| Mortgage total cost | — |
| Verdict | — |
A land contract (contract for deed, installment land contract) is seller-financed real estate where the buyer takes possession and pays installments but the seller holds legal title until the contract is paid in full. It's the lowest-credit-barrier home-buying path — and the highest equity-loss risk.
How a Land Contract Differs
Mortgage: lender funds, buyer gets title day-1, lender holds lien. Land contract: seller funds, buyer gets equitable title and possession, seller retains legal title. Both look similar from outside — radically different on default.
Default Consequences
Mortgage default = foreclosure (90-180 days, judicial in some states), buyer may receive surplus from foreclosure sale. Land contract default = forfeiture in many states (15-60 days), buyer loses all equity. Some states (Iowa, Michigan) require foreclosure-like process; others allow strict forfeiture.
Title Transfer Timing
Land contracts typically don't transfer legal title until ALL payments are made — could be 20 years. During that period the buyer can't refinance with most lenders, can't sell without seller cooperation, and has limited title insurance.
When Land Contracts Make Sense
Buyer has subprime credit (FICO 580 or below), insufficient down payment for FHA, recent foreclosure/bankruptcy in look-back window, or property type that won't qualify for conventional (rural land, unique structures, low value).
Last updated May 2026. Sources: HUD Consumer Info, Cornell Law Contract for Deed.