Calculate your future lump sum obligation with our comprehensive balloon payment mortgage calculator. Ideal for commercial loans, investment properties, or private lending, this tool helps you visualize the trade-off between lower monthly payments today and the large balance due at maturity.
balloon payment mortgage calculator
balloon payment mortgage calculator Formula
This calculator performs a two-step process: first calculating the monthly payment based on the full amortization schedule, and then calculating the remaining principal balance at the specific balloon date.
2. Balloon Bal = P [(1+i)^n – (1+i)^p] / [(1+i)^n – 1]
Variables
- n: Total Amortization Months (e.g., 360 for 30 years).
- p: Balloon Term Months (e.g., 60 for 5 years).
- P: Loan Principal.
- i: Monthly Interest Rate.
Related Calculators
- 5 Year Balloon Calculator
- Commercial Loan Calculator
- Interest Only Calculator
- Refinance Breakeven Calculator
What is a Balloon Payment Mortgage Calculator?
A balloon payment mortgage calculator is a specialized financial tool used to analyze loans that do not fully amortize over their term. Unlike a standard 30-year fixed mortgage where the balance reaches $0 at the end, a balloon mortgage leaves a substantial balance (the “balloon”) that must be paid off in a lump sum.
These loans are common in commercial real estate, seller financing deals, and some residential investment loans. The benefit is usually a lower interest rate or lower monthly payments for the initial period.
How to Calculate Balloon Payment Mortgage (Example)
- Define Amortization: Decide on the payment schedule (e.g., 30 years) to determine how much you pay monthly.
- Define Balloon Term: Decide when the loan matures (e.g., 7 years).
- Run Calculation: The tool calculates 84 payments (7 years) of principal and interest.
- Result: The remaining principal after the 84th payment is your Balloon Payment.
Frequently Asked Questions (FAQ)
If you cannot pay the lump sum cash, you typically must refinance the loan into a new mortgage or sell the property to pay off the debt.
Yes, they carry “refinance risk.” If property values drop or interest rates spike when your balloon is due, you might find it difficult to refinance.
Usually, yes, for the duration of the balloon term (e.g., fixed for 5 or 7 years), but terms can vary by lender.
Yes. Any extra principal payments you make during the term will directly reduce the final balloon amount due.