Finance

Balloon Payment Calculator

Calculate the balloon payment due at the end of a partially amortized loan.

Loan Amount ($)

Interest Rate (%/yr)

Amortization Period (years)

Payment calculated as if this term

Balloon Due After (years)

Remaining balance due as lump sum

How it works:
Payment based on full amortization period (e.g., 30 years)
After balloon period (e.g., 7 years), remaining balance is due as lump sum
Balloon = Loan × [(1+r)^n − (1+r)^p] / [(1+r)^n − 1]

What is a Balloon Payment?

A balloon loan has regular monthly payments calculated on a long amortization schedule (e.g., 30 years) but the loan comes due much sooner (e.g., 5-7 years). The remaining balance — the "balloon" — must be paid in full or refinanced.

When Balloon Loans Are Used

Commercial real estate: 5-10 year balloons with 20-25 year amortization
Bridge loans: Short-term financing with balloon payoff
Construction loans: Convert to permanent financing at balloon date

Risk

The main risk is refinancing risk — if rates have risen or your credit has deteriorated at balloon date, you may face unfavorable terms or inability to refinance.