Balloon Loan Calculator
Shopping a balloon mortgage or balloon payment loan? Enter the loan amount, interest rate, amortization term, and when the balloon comes due to estimate your monthly payment, the lump-sum balloon payment, and how much interest you'll pay before the due date. No sign-up — everything runs in your browser.
Frequently Asked Questions
What is a balloon loan?
A balloon loan is amortized like a normal long-term loan — say 30 years — but the entire remaining balance comes due as one lump sum, the balloon payment, after a much shorter period, commonly 5, 7, or 10 years. Borrowers usually plan to sell, refinance, or pay off the balance before the due date.
How is the balloon payment calculated?
First the monthly payment is calculated as if the loan fully amortized over the long amortization term. Then the remaining balance is computed after the balloon period's worth of payments: balance = principal × (1 + i)k − payment × (((1 + i)k − 1) / i), where i is the monthly rate and k is the number of monthly payments made. That remaining balance is your balloon payment.
What is a balloon mortgage vs. a regular mortgage?
A regular mortgage amortizes to zero by the end of its term. A balloon mortgage uses a long amortization schedule to keep monthly payments low but demands the leftover balance in one payment years earlier. Monthly payments on a 30-year-amortized balloon loan are identical to a 30-year fixed loan at the same rate — the difference is entirely the lump sum at the end.
What happens when the balloon payment is due?
You must pay the full remaining balance on the due date. Most borrowers refinance into a new loan, sell the property, or pay cash. The risk: if property values fall or your credit worsens, refinancing may be expensive or unavailable — so never take a balloon loan without a realistic exit plan.
Are balloon loans a good idea?
They can make sense for short-term situations — a flip, a bridge to a known future sale, or a business that expects a cash event. They are risky as long-term housing finance because the due date is fixed regardless of market conditions. Compare the total interest and the balloon amount here against a fully amortizing loan before deciding.
Can I make extra payments to shrink the balloon?
Yes. Extra principal payments reduce the balance the balloon is computed from, so the lump sum shrinks dollar-for-dollar (plus saved interest). If you plan to pay the loan off early anyway, a balloon structure with aggressive extra payments can be cheaper than a higher-rate standard loan.