About the Balloon Payment Calculator
This balloon payment calculator shows the two numbers that define a balloon loan: the regular monthly payment and the large lump sum — the balloon — due when the loan matures. Payments are usually calculated as if the loan ran for a long amortization period (such as 30 years), but the whole remaining balance comes due after a much shorter term (such as 5 or 7 years). You can also model interest-only balloon loans, where the entire principal is due at the end.
Balloon structures are common in commercial real estate, seller-financed home sales, bridge loans and some auto and equipment loans. Use the calculator to check whether you could realistically refinance, sell or save enough to cover the balloon, and to see how much of your payments go to interest before it hits.
The balloon is the remaining balance on the amortization schedule after the balloon term, assuming a fixed rate and on-time payments. If you cannot pay or refinance it when due, you may risk default, so plan the exit before signing.
With the default inputs, the balloon payment due is $271,248.73. Change any value above to recalculate instantly.
How to use the balloon payment calculator
- 1Enter the loan amount and interest rate.
- 2Choose amortizing or interest-only payments.
- 3For amortizing loans, enter the amortization period that sets the payment (e.g. 30 years).
- 4Enter when the balloon comes due (e.g. 5 or 7 years).
- 5Review the balloon amount and plan how you will pay or refinance it.
Formula and method
For an amortizing balloon loan, the monthly payment M is calculated over the full amortization period N, just like a normal mortgage. The balloon is the remaining balance after k payments, given by the future value of the loan minus the future value of the payments made — the standard remaining-balance formula. For an interest-only loan the payment is simply P × r and the whole principal remains due.
Interest paid before the balloon is total payments minus the principal they repaid. Total cost adds the balloon, assuming it is paid in cash; refinancing it would add further interest and fees.
- P
- Original loan amount
- r
- Monthly interest rate (annual ÷ 12)
- N
- Months in the amortization period
- k
- Months until the balloon is due
Worked examples
$300k, 6.5%, 30-year amortization, 7-year balloon
Payments are set as if it were a 30-year loan: $1,896.20 a month. After 84 payments totalling about $159,281, only $28,751 of principal has been repaid, so a balloon of about $271,249 is due.
Interest-only for 5 years
Interest-only payments on $300,000 at 6.5% are $1,625 a month. After 60 payments ($97,500, all interest) the full $300,000 principal is still due as the balloon.
$200k at 7%, 15-year amortization, 5-year balloon
A shorter 15-year amortization raises the payment to $1,797.66 but pays principal down faster: after 5 years the balloon is about $154,826 and you have paid roughly $62,685 in interest.
Frequently asked questions
What is a balloon payment?+
A balloon payment is a large lump sum due at the end of a loan whose regular payments did not fully repay it. It equals the remaining balance on the amortization schedule when the loan matures.
How do you calculate a balloon payment?+
Find the regular payment using the amortization period, then compute the remaining balance after the balloon term: Balloon = P(1+r)^k − M((1+r)^k − 1)/r, where r is the monthly rate and k the number of payments made.
Are balloon mortgages still available?+
For US home purchases they are rare, because most balloon loans cannot be qualified mortgages except from certain small and rural lenders. They remain common in commercial real estate, seller financing and business lending.
What happens if I cannot pay the balloon?+
You would need to refinance, sell the property or negotiate an extension with the lender. If none of these work, the lender can treat it as a default, which may lead to foreclosure or repossession.
Why choose a balloon loan?+
Lower payments than a fully amortizing loan of the same length, useful when you expect to sell, refinance or receive a large payment before the balloon date. The risk is that rates or property values move against you.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.