Balloon Loan Calculator
Work out the monthly payment and the lump-sum balloon due on a balloon loan — amortized, interest-only or with a balloon you choose — plus a yearly schedule.
A balloon loan keeps the monthly payment low for a few years and then asks for the remaining balance in one large payment. This calculator shows both numbers: the regular payment and the balloon you will owe when the term ends. It handles the three common structures — payments amortized over a longer schedule (for example a 7-year balloon on a 30-year schedule), interest-only payments, and payments sized to leave a balloon amount you pick.
How to use this tool
- Enter the loan amount and the yearly interest rate.
- Enter when the balloon falls due, in years.
- Choose how the monthly payment is set: amortized, interest-only, or sized for a chosen balloon.
- For amortized loans enter the amortization term; for a chosen balloon enter its amount.
- Read the payment, the balloon and the year-by-year balance.
Formula
M = P × r / (1 − (1 + r)^−N)
Balloon = P × (1 + r)^k − M × ((1 + r)^k − 1) / r
P is the loan amount, r the monthly rate (yearly rate ÷ 12 ÷ 100), N the number of months in the amortization schedule and k the number of payments before the balloon. Interest-only payments are simply P × r, which leaves the full principal as the balloon. When you choose the balloon B, the payment becomes r × (P(1 + r)^k − B) / ((1 + r)^k − 1).
Example
A $200,000 loan at 7%, amortized over 30 years with a balloon after 7 years, has a monthly payment of $1,330.60. After 84 payments you still owe a balloon of about $182,295 — roughly 91% of the original loan — and you will have paid about $94,066 in interest along the way.
Frequently asked questions
Why is the balloon so large?
Early payments on a long amortization schedule are mostly interest, so the balance falls slowly. On a 30-year schedule only a small share of the principal is repaid in the first five to seven years.
What happens if I cannot pay the balloon?
Borrowers usually refinance, sell the asset, or negotiate an extension before the due date. Refinancing depends on rates and your credit at that time, which is the main risk of a balloon loan.
Is a balloon loan the same as an interest-only loan?
Not always. Interest-only is one type of balloon loan where no principal is repaid, so the balloon equals the full loan. Many balloon loans do repay some principal through amortized payments.
Does this include fees or taxes?
No. It covers principal and interest only. Add property tax, insurance or lender fees separately.
This tool gives an estimate for general information only. It is not financial, tax, legal or medical advice — check with a qualified professional before you rely on the result.
Last updated: 2026-10-30