Balloon Payment Calculator
The monthly payment and the balloon left to pay on a loan amortised over one term but due after a shorter one.
Result
Balloon payment due: $273,441.97
The balloon must be paid, refinanced or covered by a sale when it falls due.
- Monthly payment until then
- $1,995.91
- Principal repaid before the balloon
- $26,558.03
- Total interest
- $141,098.41
- Total paid, balloon included
- $441,098.41
https://calcgallery.com/finance/balloon-payment-calculator/
Results are arithmetic estimates based on the values you enter. Rates, fees and terms are set by your lender or provider, and your actual agreement controls what you pay or receive. Confirm important figures with them or with a qualified adviser. Read the full disclaimer
How to use the Balloon Payment Calculator
- Enter the loan amount and the interest rate.
- Enter the term the payment is worked out on, the amortisation term, and when the balloon falls due.
- Read the balloon payment due, the monthly payment until then and the total cost.
How it is worked out
payment = P × i ÷ (1 − (1 + i)⁻ⁿ) on the amortisation term nballoon = P(1 + i)ᵐ − payment × ((1 + i)ᵐ − 1) ÷ i after m paymentstotal = payment × m + ballooni is the annual rate divided by 12. The balloon is worked out directly, rounded once to the cent, rather than by running the monthly schedule and reading off the balance. Rounding every month for years lets small errors build up in exactly the number this page exists to show.
At a zero rate the payment on 300,000 over 30 years is 833.33, since a payment cannot include a fraction of a cent. After 84 payments, 230,000.28 remains, and the page shows that figure rather than a rounder one that was never paid.
Where balloon loans are used
Balloon structures are common in commercial property loans, some business and vehicle finance, and seller-financed home sales. Regulation Z requires a balloon payment to be disclosed. The loan agreement will state its amount and date, and both should match what this page shows for the same terms.
With your numbers
- Payment on a 30-year schedule = $1,995.91
- After 84 payments the balance is P(1 + i)^m − PMT((1 + i)^m − 1) ÷ i = $273,441.97
- Total paid = $441,098.41
Quick reference
The balloon must be paid, refinanced or covered by a sale when it falls due.
| Example | Balloon payment due |
|---|---|
| USD 300,000 at 7%, 30-year schedule, 7-year balloon | $273,441.97 |
| Same with the balloon at 30 years | $0.00 |
| USD 300,000 at 7%, 15-year schedule, 5-year balloon | $232,238.75 |
| USD 300,000 at 0%, 30-year schedule, 7-year balloon | $230,000.28 |
| USD 1,000,000 at 6.5%, 25-year schedule, 10-year balloon | $775,113.87 |
| USD 40,000 at 8%, 7-year schedule, 3-year balloon | $25,537.59 |
Common questions about the Balloon Payment Calculator
- What is a balloon payment?
- A large final payment that clears whatever is left of a loan when it falls due. The monthly payment is worked out as if the loan ran for a longer term, which keeps it low, but the loan ends sooner, so most of the principal is still owed at the end. On 300,000 at 7% worked out over 30 years and due after 7, the payment is 1,995.91 and 273,441.97 is due at the end.
- How do people pay the balloon?
- Usually by refinancing into a new loan, selling the property or asset, or from savings. Each depends on something outside the borrower’s control: rates when the balloon falls due, the value of the property, or a lender being willing to refinance. Planning how the balloon will be paid is the part of these loans most often left too late.
- Why is so much still owed after years of payments?
- Because early payments on a long amortisation schedule are mostly interest. After 7 years of a 30-year schedule at 7%, only about 9% of the principal has been repaid. A shorter amortisation term raises the payment but leaves a much smaller balloon.
- What if the balloon is due at the end of the term?
- Then there is no balloon, and the loan is an ordinary amortising loan. The page gives exactly the payment and total the loan payment calculator gives for the same loan.