Balloon Mortgage Calculator

Calculate your monthly payments and balloon payment for a balloon mortgage

Loan Details

Currency US Dollar ($) Euro (€) British Pound (£) Canadian Dollar (C$) Australian Dollar (A$)

Loan Amount

Annual Interest Rate (%)

Loan Term (Years) 5 years 7 years 10 years 15 years

Balloon Payment After (Years) 5 years 7 years 10 years

Amortization Period (Years) 15 years 20 years 25 years 30 years

Balloon Mortgage Results

Monthly Payment

-

Based on amortization period

Balloon Payment

-

Due after balloon term

Interest Paid

-

During balloon term

Balloon Mortgage Details

Detail	Amount
Loan Amount	-
Interest Rate	-
Loan Term	-
Balloon Term	-
Amortization Period	-
Principal Paid During Balloon Term	-
Remaining Balance at Balloon Term	-

Amortization Schedule (First 5 Years)

Year	Payment	Principal	Interest	Balance
Calculate to see amortization schedule

About Balloon Mortgages

What is a Balloon Mortgage?

A balloon mortgage is a type of loan that has:

• Lower monthly payments based on a long amortization period (typically 30 years)

• A shorter loan term (typically 5-10 years)

• A large "balloon" payment of the remaining balance at the end of the loan term

These mortgages can be risky as they require refinancing or paying the large balloon payment when the term ends.

Pros & Cons

Advantages:

• Lower monthly payments than traditional mortgages

• May qualify for a larger loan amount

• Good for those planning to sell before balloon payment is due

Disadvantages:

• Large lump sum payment required at end of term

• Risk of not qualifying for refinancing when balloon payment is due

• Interest rates may be higher when refinancing

This calculator provides estimates only. Consult with a financial advisor before making decisions about balloon mortgages. Print Results

1. Introduction

A Balloon Mortgage Calculator helps borrowers understand the unique payment structure of balloon mortgages, which feature:

• Lower monthly payments initially

• One large "balloon payment" at loan term end

• Common terms: 5/25 or 7/23 (5-7 year term with 25-30 year amortization)

2. Key Features of Balloon Mortgages

Feature	Description	Example
Term	Short duration before balloon payment	5-10 years
Amortization	Payment calculation period	30 years
Monthly Payments	Based on full amortization	Lower than traditional
Balloon Payment	Large final payment	Remaining principal

3. Calculator Inputs

Input	Description	Typical Values
Loan Amount	Total borrowed	$200,000-$2M
Interest Rate	Annual rate	4%-8%
Balloon Term	Years until payment due	5, 7, or 10
Amortization Period	Full repayment timeline	30 years
Start Date	Loan origination date	Current date

4. Calculation Methodology

Monthly Payment Formula

Payment = [P × (r(1+r)^n)] / [(1+r)^n - 1]

Where:

• P = Principal

• r = Monthly interest rate

• n = Total payments (amortization term)

Balloon Payment Calculation

Balloon = Original Loan × [(1+r)^(amortization) - (1+r)^(paid periods)] / [(1+r)^(amortization) - 1]

5. Example Calculation

Scenario:

• Loan Amount: $500,000

• Interest Rate: 5.5%

• Balloon Term: 7 years

• Amortization: 30 years

Results:

1. Monthly Payment: $2,838 (based on 30-year amortization)

2. Remaining Balance at Year 7: $456,189 (balloon payment)

3. Total Interest Paid: $98,393 (first 7 years)

6. Comparison to Traditional Loans

Metric	Balloon Mortgage	30-Year Fixed
Monthly Payment	$2,838	$3,408
Year-7 Balance	$456,189 (due)	$441,274
Interest Paid (7yrs)	$98,393	$119,000

7. When Balloon Mortgages Make Sense

✅ Best For:	❌ Risks:
Short-term ownership	Refinancing risk
Expected large future income	Property value changes
Investors with exit strategy	Balloon payment shock
Business owners with variable cash flow	Qualification challenges at term end