Calculate your future obligations with our mortgage calculator balloon loan. This tool is essential for analyzing loans with short terms but long amortization schedules, helping you determine the lump sum payment required at maturity.
mortgage calculator balloon loan
mortgage calculator balloon loan Formula
This calculator uses a two-step process: first calculating the monthly payment based on the full amortization schedule, and then calculating the remaining principal balance at the balloon due date.
2. Balloon = P [(1+i)^n – (1+i)^p] / [(1+i)^n – 1]
Variables
- Pmt: Monthly Payment based on Amortization.
- n: Total Amortization Months (e.g., 360).
- p: Balloon Term Months (e.g., 60 or 84).
- P: Loan Principal.
Related Calculators
- Balloon Payment Calculator
- Interest Only Calculator
- Commercial Mortgage Calculator
- Refinance Breakeven Calculator
What is a Mortgage Calculator Balloon Loan?
A mortgage calculator balloon loan is a tool for loans that do not fully pay off over their term. Instead, you make smaller payments for a set period (usually 5 or 7 years), and then owe the entire remaining balance at once.
These loans are common in commercial real estate, seller financing, and for investors who plan to sell or refinance before the term ends.
How to Calculate a Balloon Loan (Example)
- Loan Details: $300,000 loan at 7% interest.
- Amortization: Calculated over 30 years to keep payments low (~$1,995/mo).
- Balloon Term: The loan is due in 7 years (84 months).
- Result: After 7 years of payments, you still owe ~$273,000, which is your balloon payment.
Frequently Asked Questions (FAQ)
If you cannot pay the lump sum, you must refinance the loan, sell the property, or negotiate an extension with the lender.
Balloon loans often have lower interest rates than fully amortizing loans because the lender’s risk is limited to a shorter timeframe.
Not always. This calculator assumes a Principal & Interest (P&I) payment based on the amortization term. However, interest-only balloon loans also exist.
Yes. Making extra principal payments during the term will directly reduce the final balloon amount you owe.