Balloon loan calculator
See the balance left for a final balloon payment.
- Formula and assumptions shown
- Table and CSV export
- Runs in your browser
How it works
The regular payment is calculated as if the loan amortizes fully over the scheduled term. If the balloon date comes earlier, the schedule shows the remaining balance after that month's regular payment as the balloon due.
Regular payment follows the selected amortization term; balloon = balance remaining after the entered number of payments.
A large final payment creates refinancing and liquidity risk. The calculator shows the arithmetic but does not recommend a balloon structure or predict the borrower's ability to refinance.
Assumptions
- The scheduled annual rate is fixed and divided by 12.
- The regular payment is sized over the full entered amortization term, with payments applied monthly to interest then principal.
- The balloon date is after the entered number of regular payments and cannot exceed the full amortization term.
- No refinance, sale, penalty, or extension is assumed after the balloon date.
Worked example
$100,000 at 4% with a five-year balloon
Using a 30-year amortization term gives a monthly payment of about $477.42. After 60 regular payments, the remaining balance due is about $90,447.51.
Step by step
- Set the amortization basis. The monthly rate is 4% ÷ 12 = 0.3333%, and the payment is sized as if the loan ran the full 30 years, or 360 payments.
- Compute the regular payment. $100,000 × 0.003333 ÷ (1 − 1.003333^−360) = $477.42 a month.
- Split the first payment. Month 1 interest is $100,000 × 0.3333% = $333.33, so only $144.08 reduces principal and the balance falls to $99,855.92.
- Find the balance after 60 payments. Balance = $100,000 × 1.003333^60 − $477.42 × (1.003333^60 − 1) ÷ 0.003333 = $90,447.51. That is the balloon due with the 60th payment.
- Account for what was paid. The 60 payments total $28,644.92, of which $19,092.43 is interest and only $9,552.49 is principal.
How to read your result
The headline is the balloon payment: the balance still owed after the entered number of regular payments. The secondary figures show the scheduled monthly payment, the interest paid before the balloon, and the balloon month. The balloon is due in addition to that month’s regular payment.
The table and chart run only to the balloon month. The balance column shows what is still owed after each payment, so the last row equals the balloon. The flat slope of the line shows why the balloon is large: early payments on a long amortization schedule are mostly interest.
The model does not assume a refinance, sale, or extension when the balloon comes due. If the borrower plans to refinance, the new loan’s rate, fees, and approval are unknown today, so the balloon amount is the figure that has to be covered one way or another.
What changes the result most
- Balloon date
- With a 30-year schedule at 4%, the balloon is $94,498.73 after 36 payments, $90,447.51 after 60, $86,059.47 after 84, and $78,783.96 after 120.
- Amortization term
- A shorter schedule raises the payment and shrinks the balloon. Over 15 years the payment is $739.69 and the 5-year balloon is $73,059.11; over 20 years it is $605.98 and $81,923.78.
- Interest rate
- At 6% the payment rises to $599.55 and the 5-year balloon to $93,054.36, with $29,027.39 of interest before the balloon; at 7% the figures are $665.30 and $94,131.59. Higher rates leave less of each payment for principal.
Questions
Is a balloon payment the same as the last regular payment?
No. It is the remaining balance after the regular modeled payments and can be much larger than those payments.
Can I refinance the balloon?
The calculator reports the balance to plan for. Any refinance would need a separate rate, approval, fee, and term scenario.
Does this include adjustable rates?
The core model uses entered fixed assumptions. An adjustable contract needs a rate path and terms from its agreement.
What is a balloon payment?
A balloon payment is a lump sum due at the end of a loan whose regular payments did not repay the full balance. In the example, payments are set as if the loan ran 30 years, but the remaining $90,447.51 is due after 5 years. Balloon structures appear in some commercial real estate, business, auto, and mortgage lending.
What is a balloon mortgage?
A balloon mortgage has regular payments for a set period, often 5 to 7 years, followed by a balloon of the remaining balance. Federal ability-to-repay rules generally keep loans with balloon payments out of the Qualified Mortgage category, with exceptions for certain small creditors, so they are less common for home purchases than they once were.
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Sources
These references explain the concepts behind the calculation. They do not endorse this site. Estimates leave out any cost or condition you did not enter.