Balloon Payment Calculator
A balloon loan keeps your monthly payment low by calculating it over a long amortization period — say 30 years — but it does not actually run that long. After a much shorter term, the entire remaining balance comes due in one large lump sum: the balloon payment. This calculator shows both sides of that bargain: the modest monthly payment you enjoy in the meantime and the large balloon you must be ready to settle. All figures are currency-agnostic; switch the symbol at the top of the page.
- Payments before balloon
- Balloon payment
- Monthly payment
- $1,199.10
- Balloon payment
- $179,278.77
- Payments before balloon
- $100,724.49
- Total of payments + balloon
- $280,003.26
By amortizing over 30 years but settling in 7, your monthly payment of about 1,199 stays low — but a lump sum of 179,279 falls due at the end. You will have paid roughly 100,724 in installments before then, and must refinance or sell to cover the balloon.
How it works
The monthly payment on a balloon loan is set as though the loan would fully amortize over the long schedule you enter — for example, 30 years. That long horizon spreads the principal thinly across many payments, which is exactly why the monthly figure is so low. But the loan is not allowed to finish that schedule.
Instead, at the end of the shorter balloon term, the lender calls in everything still owed. To find that amount, the calculator builds the full amortization schedule from the long period and reads off the outstanding balance at the balloon month. Because the early years of a long amortization repay very little principal, that remaining balance — the balloon — is large, often close to the original loan.
The calculator also tallies what you pay along the way: the monthly payment multiplied by the number of months before the balloon. Add the balloon itself and you have the total cash the loan demands. The key planning point is that the balloon almost always has to be met by refinancing into a new loan or selling the asset, because few borrowers can produce that lump sum from savings. Balloon structures are common in commercial real estate and some business loans, where the borrower expects to refinance or sell before the balloon arrives. The risk is that if credit tightens or the asset's value falls, refinancing may be costly or unavailable exactly when the balloon is due.
The monthly payment is computed as if the loan fully amortized: payment = P · i · (1 + i)^n / ((1 + i)^n − 1), with n = amortization years × 12. The balloon is the remaining loan balance after balloon years × 12 payments. Payments before balloon = payment × balloon-term months.
Worked example
Borrow 200,000 at 6% with payments amortized over 30 years (360 months) but a balloon due in 7 years. The monthly payment is calculated on the full 30-year schedule, working out to about 1,199 a month. After 7 years (84 payments) you have paid roughly 100,724 in installments, yet because early payments are mostly interest, about 180,000 of principal still remains — that is your balloon payment. Add the installments and the balloon together and the loan demands roughly 280,000 in total.
Things to watch out for
The balloon term must fall before full amortization — if you set it equal to or beyond the amortization period there is no balloon, and the calculator returns an error. A 0% rate simply means level principal repayment, so the balloon is the original amount minus the principal paid. Always have an exit plan: most balloons are met by refinancing or selling, and the calculator highlights how large that obligation is so it does not catch you unprepared.
Frequently asked questions
What is a balloon payment?+
It is the large lump sum of remaining principal due at the end of a balloon loan. Your monthly payments are calculated over a long amortization schedule to keep them low, but the loan ends early, leaving most of the balance to be paid in one final payment.
Why is the balloon so large?+
Because the early years of a long amortization repay mostly interest and very little principal. When the balloon falls due after only a few years, the outstanding balance is still close to the original loan amount.
How do people pay the balloon?+
Most borrowers refinance into a new loan or sell the asset before the balloon is due. Few pay it from cash. That is why balloon loans carry refinancing risk — credit conditions or asset values may have changed when the lump sum comes due.
Where are balloon loans used?+
They are common in commercial real estate and some business lending, where the borrower expects to refinance or sell within the balloon term. They suit short holding periods but require a solid exit plan for the lump sum.
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Disclaimer: This calculator is for educational and informational purposes only and provides estimates, not financial advice. Interest rates, taxes, fees, and local rules vary and change over time. Confirm figures with a qualified professional before making any financial decision.
Last reviewed: 2026-06-22