Balloon Mortgage Calculator
Calculate your monthly payments and balloon payment amount. Compare interest-only vs amortized payments and see the full amortization schedule.
Loan Details
Payment calculated as if paying over this period
Extra payments reduce your balloon payment
💵 Monthly Payment
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📊 Common Balloon Structures
Frequently Asked Questions
A balloon mortgage can be a good idea in specific situations: if you plan to sell the property before the balloon payment is due, expect a significant income increase, or are using short-term financing for investment properties. However, they carry significant risk—if you can't make the balloon payment, refinance, or sell, you could lose your home. They're best suited for experienced investors or borrowers with clear exit strategies.
To calculate a balloon mortgage: 1) Determine your monthly payment using the amortization period (e.g., 30 years) even though your loan term is shorter (e.g., 5 years). 2) Calculate how much principal you'll pay off during the balloon period. 3) The remaining balance is your balloon payment. Formula: Monthly Payment = P × [r(1+r)^n] / [(1+r)^n-1], where P = principal, r = monthly rate, n = total months in amortization period.
A '30 due in 15' balloon mortgage means your monthly payments are calculated as if you're paying off the loan over 30 years, but the entire remaining balance is due after 15 years. This results in lower monthly payments than a standard 15-year mortgage, but you'll owe a large lump sum at the end. For example, on a $300,000 loan at 6%, your monthly payment would be about $1,799, but after 15 years you'd still owe approximately $199,000 as a balloon payment.
Extra payments on a balloon mortgage reduce your principal balance, which directly reduces your balloon payment amount. For example, paying an extra $200/month on a $300,000 loan could reduce your balloon payment by $15,000-$25,000 over 5-7 years. Extra payments also reduce total interest paid. However, confirm with your lender that extra payments apply to principal and there are no prepayment penalties.
Yes, refinancing before the balloon payment is due is one of the most common exit strategies. You can refinance into a traditional 30-year fixed mortgage, another balloon mortgage, or an ARM. However, refinancing depends on: your credit score at the time, home equity, current interest rates, and ability to qualify. It's wise to start the refinancing process 6-12 months before your balloon payment is due.