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Balloon loan calculator

The monthly payment of a balloon loan, and what is left to pay at the end.

Reviewed by Victor Yuki Matusita on . First published .

Your numbers stay on your device
$
%
years

Balloon payment

$182,295.35

After 83 payments of $1,330.60, the balloon is due with payment 84, on top of it. Until then you pay $94,066 of interest.

  • Loan $200,000 · 68%
  • Interest $94,066 · 32%

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Schedule up to the balloon

How to use the balloon loan calculator

  1. Enter the loan amount, the rate and the amortization term the payment is based on.
  2. Type the payment number the balloon is due with, for example 84 for seven years.
  3. Read the monthly payment and the balloon, and open the schedule up to the balloon.

What a balloon loan is

The payments are figured as if the loan ran long, so they stay low, but the loan ends early: what is still owed then falls due at once. The CFPB describes a balloon as a large, one-time payment at the end of the loan term.

The risk at the end

Many borrowers plan to sell or refinance before the balloon. If rates are higher then, or the property is worth less, that can be hard. Check the balloon against what you could pay or borrow, and keep the schedule.

How the balloon is worked out

The formula

The payment is M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1) with n the months of the amortization term and r the yearly rate ÷ 12.

The schedule runs month by month until the balloon month; the balloon is the balance left after that regular payment, the same as the future value of the loan minus the payments made.

Assumptions

  • The monthly payment is worked out as if the loan ran the whole amortization term, at a fixed rate.
  • Interest is charged once a month at the yearly rate divided by 12, on the balance, rounded to the cent.
  • The balloon is the balance left after the regular payment of the balloon month; that last payment is the regular payment plus the balloon.
  • No refinancing of the balloon, fees or rate changes are included.

Worked example

This is the example the calculator opens with, worked out by the same engine you use above.

You enter
Loan amount$200,000.00
Rate7%
Amortization term30 years
Balloon with payment84
You get
Monthly payment$1,330.60
Balloon payment$182,295.35
Due with paymentPayment 84
Last payment with the balloon$183,625.95
Interest$94,065.75
Total paid$294,065.75

After 83 payments of $1,330.60, the balloon is due with payment 84, on top of it. Until then you pay $94,066 of interest.

Sources

Educational tool

This calculator is an educational tool, not financial advice and not a loan offer. Your contract sets the balloon amount and date.

Questions about balloon loans

Why is the monthly payment so low?

It is worked out on a long amortization term, so each payment only repays a little principal. The rest waits for the balloon.

Where are balloon loans used?

In some car loans, business loans and commercial or private mortgages. The CFPB notes they are generally not allowed in a Qualified Mortgage, with limited exceptions.

What happens if I cannot pay the balloon?

You would need to refinance, sell or reach an agreement with the lender. Plan for it from the start.

Is the balloon the same as the last payment?

The balloon is what is left after the regular payment of that month; the last payment is the two together. The calculator shows both.

Privacy

Your numbers stay on your device. The calculator runs in your browser, so nothing you type is sent anywhere, and the link you copy keeps the numbers after the #, a part of the address your browser never sends.