Balloon Mortgage Calculator

A Balloon Mortgage Calculator helps you determine the remaining balance on a balloon mortgage at the end of the term, as well as the monthly payments until the balloon payment is due. A balloon mortgage typically involves making smaller payments over a set period (usually 5, 7, or 10 years), with the full loan balance due as a lump sum (the "balloon" payment) at the end of the term.

How a Balloon Mortgage Works:
Short-Term Period: You make regular payments for a short period, often 5 to 10 years.
Lower Monthly Payments: Payments are usually lower than those of a traditional mortgage because they are not paying off the entire principal during the term.
Balloon Payment: At the end of the term, the remaining balance (the "balloon") is due in full. This lump-sum payment can be significant, often the majority of the original loan balance.
Balloon Mortgage Calculator Key Inputs:
Loan Amount (Principal): The amount you borrowed.
Interest Rate: The annual interest rate of the loan.
Loan Term: The term of the mortgage (e.g., 30 years, 5 years).
Balloon Term: The period after which the balloon payment is due (e.g., 5 or 7 years).
Monthly Payment: Typically calculated based on the amortization schedule for the balloon period, which usually assumes a full amortization over a longer period (e.g., 30 years).
Balloon Payment: The remaining loan balance due at the end of the balloon period.
Balloon Mortgage Payment Calculation:
For the first part of the loan, you'll typically make smaller monthly payments based on a 30-year amortization schedule, but the loan term might only be 5 or 7 years. The calculator can tell you:

Monthly Payments: How much you'll pay monthly until the balloon payment is due.
Remaining Loan Balance: The amount you'll owe at the end of the balloon term, which is due as a lump sum payment.
Example:
Let's assume:

Loan Amount: $200,000
Interest Rate: 4%
Loan Term: 30 years
Balloon Term: 5 years
With these details, the calculator would:

Determine your monthly payment assuming a 30-year amortization schedule, which would be around $955.59.
After 5 years of payments, the balloon payment (remaining loan balance) would be calculated, which would be around $186,302 (the remaining principal after 5 years).
Using the Balloon Mortgage Calculator:
You would input:

Loan amount: $200,000
Interest rate: 4%
Loan term: 30 years (for full amortization schedule)
Balloon term: 5 years
The calculator will provide:
Monthly payment (typically lower than a 30-year fixed mortgage)
Balloon payment due at the end of the term.
Why Use a Balloon Mortgage Calculator?
Understand Your Payment Structure: If you have a balloon mortgage or are considering one, this tool helps you understand your monthly obligations and what the large final balloon payment will be.
Plan for the Future: It helps you plan for the large lump sum at the end of the balloon term, so you're not caught off guard.
Compare Balloon vs. Traditional Mortgages: It can help you compare the costs of balloon mortgages against traditional fully amortized mortgages.