Balloon Mortgage Calculator
A balloon mortgage keeps payments low by amortizing over a long schedule, then requires a large lump sum when the short term ends.
A worked example
Running this tool on current national benchmarks (Federal Reserve / Freddie Mac via FRED (St. Louis Fed)) — swap in your own numbers to see how the result moves.
- Loan amount
- $280,000
- Interest rate
- 6%
- Amortized over (years)
- 30
- Balloon due in (years)
- 7
after 7 years of $1,678.74/mo
- Monthly payment$1,678.74
- Balloon due$250,990
- Principal paid by then$29,010
How the balloon payment due changes with loan amount
Holding the other inputs at the example above, here is how the result moves as loan amount changes.
| Loan amount | Balloon payment due | Monthly payment |
|---|---|---|
| $200,000 | $179,279 | $1,199.10 |
| $300,000 | $268,918 | $1,798.65 |
| $450,000 | $403,377 | $2,697.98 |
| $600,000 | $537,836 | $3,597.30 |
The math behind it
Your monthly payment is calculated as if the loan were being paid off over a long amortization schedule — say 30 years — which keeps it low. But the loan actually ends after a much shorter balloon term. The calculator amortizes the balance month by month to that balloon date; whatever principal remains is the lump-sum balloon payment you must pay off, refinance, or cover by selling.
Assumptions & limits
- The rate is fixed for the whole balloon term. The payment is based on the longer amortization period, so only a small share of principal is repaid before the balloon comes due.
- The full remaining balance is due as a single lump sum on the balloon date — the calculator assumes no reset-to-amortizing option.
- Payments are principal and interest only. Taxes, insurance, and any escrow are excluded.
- The calculator does not model refinancing or the interest rate you might get when the balloon matures.
Source: Freddie Mac PMMS via FRED. Annual averages; latest weekly reading shown.
Common questions
What happens when the balloon payment comes due?
You owe the entire remaining balance at once. Most borrowers refinance into a new loan, sell the home, or pay it off with savings. If none of those is possible when the date arrives, you risk default, so a repayment plan is essential before taking a balloon loan.
Why is the balloon so large if I have been paying for years?
Because your payment follows a long amortization schedule — often 30 years — even though the loan ends in five to seven. Early payments are mostly interest, so you have repaid only a small slice of principal by the balloon date, and the rest remains as the lump sum.
How is a balloon mortgage different from an ARM?
An ARM keeps the loan alive and adjusts the rate over time. A balloon mortgage keeps the rate and payment fixed but ends the loan early, demanding the full balance as one payment. A balloon is about the payoff deadline; an ARM is about rate changes.