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Balloon Mortgage Calculator FullScreen

Estimate your monthly payments and remaining balance for a balloon mortgage. Input the loan amount, interest rate, term, and balloon payment details to calculate your payment schedule.

Balloon Mortgage Calculator




What is Balloon Mortgage Calculator

A Balloon Mortgage Calculator is a tool used to calculate the payments and remaining balance of a balloon mortgage. A balloon mortgage is a type of loan that has fixed monthly payments for a certain period, usually 5 to 7 years, followed by a final "balloon" payment that pays off the remaining principal balance in full.

Here's how a Balloon Mortgage Calculator typically works:

  1. Loan Details: Enter information about your balloon mortgage, including the initial loan amount, interest rate, loan term (including the initial fixed period), and the balloon payment due at the end of the term.

  2. Calculation Results: The calculator will provide various results, such as:

    • Monthly Payment: It will display the fixed monthly payment during the initial period of the loan. This payment includes both interest and principal portions.

    • Remaining Balance: The calculator will show the outstanding principal balance at the end of the fixed period when the balloon payment is due. This is the amount that must be paid in full to satisfy the loan.

    • Total Interest Paid: It will estimate the total interest paid over the life of the loan, including both the fixed period and the balloon period. This can give you an idea of the overall cost of the loan.

It's important to note that a balloon mortgage requires careful consideration, as it typically involves a large payment due at the end, which could pose financial challenges for borrowers. Some borrowers plan to refinance or sell the property before the balloon payment becomes due, while others may have sufficient funds to pay off the balloon amount directly. It's essential to understand the terms and risks associated with a balloon mortgage before deciding whether it's the right fit for your financial situation.

As always, it's advisable to consult with a mortgage lender or financial advisor who can provide personalized guidance based on your specific circumstances and help you understand the implications of a balloon mortgage.

How to use Balloon Mortgage Calculator?

Balloon Mortgages, compared to other types of mortgages, aren't as common as other mortgages. A 'Balloon Mortgage' does not reduce over the chosen term of the mortgage. A 'Balloon Mortgage' allows you to pay smaller payments throughout the time of the mortgage, although it results in a larger balance once the mortgage has matured. The final payment of a 'Balloon Mortgage' is very large compared to the previous payments. A 'Balloon Mortgage' is commonly found when it comes to commercial real estate, such as startup business owners, rather than residential real estate, such as future homeowners. If a 'Balloon Mortgage' is taken out for a real estate property, the lender will most likely ask for proof of a financial plan to demonstrate how the recipient plans on paying the final payment.

'Balloon Mortgages' are commonly taken out for commercial properties due to startup business owners having faith in their business plan and believing they will have sufficient funds when the time comes to pay the final payment. They are also popular among small business owners due to them not having the funds to get a property to run their business from.

  1. A Balloon Mortgage is a long-term mortgage at a low interest rate.
  2. A fixed amount is paid regularly for a shorter time until the final payment is due, which will be substantially higher.
  3. Amortization is when a certain amount is repaid periodically, including interest.

The balloon mortgage calculator assumes the following:

  1. The interest is compounded monthly.
  2. The payments are made at the end of the month.
  3. The balloon amount is paid at the same time as the last periodic payment.

You may also be interested in our free Mortgage Overpayment Calculator or Graduated Payment Mortgage Calculator