Balloon Payment Calculator

A balloon mortgage is set up so that it doesn’t fully amortized over its scheduled term. What does that mean? Well, fully amortized refers to the loan payments set up on a schedule so that the last payment pays the loan off in its entirety. You can read more about amortization in our glossary of mortgage terms. Since a balloon mortgage is not fully amortized, at the end of the term (30 years for example), the entire remaining balance is due in one final lump sum payment.

The benefit of a balloon mortgage is that it offers relatively low payments, however, as you may have guessed, that final lump sum payment can be pretty large and is the major drawback of these loans.

Instructions:

1. In the Mortgage Amount field, enter your mortgage balance.
2. In the Interest Rate field, enter the interest rate of your mortgage.
3. In the Term (in years) field, enter the mortgage length (30, for example) in years.
4. In the Amortized Over field, enter the amortization term that the payment is calculated from (This is usually 30. If you’re unsure, leave it at 30).
5. Click Sumbit.
6. Watch the magic happen.