Balloon Payment Calculator
A Loan That Amortizes Slowly, Then Comes Due All at Once
A balloon mortgage makes payments as if the loan will take decades to pay off, but the loan actually matures much sooner — leaving one large "balloon" payment for whatever principal remains once the shorter term ends. It's a structure that trades a lower monthly payment for a hard deadline: refinance, sell, or pay off the remaining balance in a lump sum when the balloon comes due.
The Formula
Balloon Balance = remaining loan balance after the shorter balloon term of payments
The monthly payment is calculated as if the loan fully amortized over the long period (say, 30 years), but only the payments made during the shorter balloon term actually occur — whatever principal is still outstanding at that point is the balloon payment due.
Where This Calculation Matters
- Commercial and investment property financing — balloon structures are common outside conventional residential mortgages, where lenders prefer shorter effective terms.
- Planning the exit strategy — knowing the exact balloon balance years in advance lets a borrower plan for refinancing or sale well before the payment comes due, rather than being caught short.
- Comparing lower payments against future risk — a balloon structure's monthly payment is calculated on a long amortization, keeping it lower than a fully-amortizing short-term loan, at the cost of refinance risk when the balloon matures.
- Negotiating loan terms — a shorter balloon term keeps more principal outstanding at maturity; comparing several balloon terms shows the tradeoff clearly.
Balloon Balance at Different Terms
On a $300,000 loan at 6.5%, payments calculated on a 30-year amortization, with the balloon due at various points:
| Balloon term | Balance due |
|---|---|
| 3 years | $289,251.73 |
| 5 years | $280,832.93 |
| 7 years | $271,248.73 |
| 10 years | $254,328.38 |
Because payments are calculated against a 30-year amortization, very little principal is retired in the early years — at 7 years, less than 10% of the original $300,000 balance has been paid down.
How to Use This Calculator
- Enter the Loan Amount and Interest Rate.
- Enter the Amortization Period (years) the monthly payment is calculated against.
- Enter the Balloon Term (years) — the shorter period after which the remaining balance comes due; it must be less than the amortization period.
- Select Calculate to see the monthly payment and the balloon balance due at maturity.
Related Calculations
Compare against a fully-amortizing loan's payoff schedule with the Extra Mortgage Payment Calculator, or check refinance capacity ahead of the balloon date with the Cash-out Refinance Calculator.