Balloon mortgage calculation
Calculate your balloon payment and understand the total cost of the balloon mortgage over its loan term.
| Monthly Payment | $?1,199.10 |
|---|---|
| Balloon Payment | $?180,478 |
| Total Interest | $?80,900 |
| Total Repayment Amount | $?280,900 |
Balloon mortgage amortization schedule
Check the full payment schedule for your balloon mortgage broken down by month.
| Date | Principal Paid | Interest Paid | Total Payments | Principal Balance |
|---|---|---|---|---|
| 2024 | $?199.10 | $?1,000.00 | $?1,199.10 | $?199,801 |
| 2025 | $?2,468.30 | $?11,921 | $?14,389 | $?197,333 |
| 2026 | $?2,620.54 | $?11,769 | $?14,389 | $?194,712 |
| 2027 | $?2,782.17 | $?11,607 | $?14,389 | $?191,930 |
| 2028 | $?2,953.77 | $?11,435 | $?14,389 | $?188,976 |
| 2029 | $?3,135.95 | $?11,253 | $?14,389 | $?185,840 |
| 2030 | $?3,329.37 | $?11,060 | $?14,389 | $?182,511 |
| 2031 | $?182,813 | $?10,854 | $?206,858 | $?0.00 |
How to calculate balloon mortgage payment?
A balloon mortgage typically involves regular monthly payments for a set period followed by a large, lump-sum payment at the end of the loan term. To calculate the balloon payment for a mortgage:
- Determine the principal amount: This is the original amount borrowed.
- Set the interest rate: Note the annual interest rate of the mortgage.
- Specify the term of regular payments: Usually, this is a shorter period than a standard mortgage term, such as 5 or 7 years, after which the balloon payment is due.
- Calculate regular payments: These are usually calculated using an amortization formula that would be applied as if the loan is a standard 30-year mortgage, for example.
- Calculate the remaining balance: At the end of the regular payment term, calculate the remaining principal balance. This balance is the balloon payment that must be paid in full to satisfy the loan.
The formula to find the balloon payment is essentially the final value of the remaining loan balance after all regular (amortized) payments have been made, based on the amortization of the total loan term (like 30 years).
Example calculation:
- Principal: $100,000
- Interest Rate: 5% annually
- Term for Regular Payments: 7 years
- Total Loan Term for Amortization: 30 years
Regular payments are calculated as if the loan would be repaid over 30 years, but at the end of 7 years, the remaining balance of the principal (not covered by the payments) is due as the balloon payment. In our example, the balloon payment would amount to $87,945.
Is balloon mortgage interest calculated on a daily basis?
No, the interest on a balloon mortgage is typically not calculated on a daily basis. Instead, it is usually calculated monthly based on the remaining principal (which can be determined using our mortgage calculator). Each monthly payment is first applied to the interest calculated from the outstanding principal balance, with the remainder of the payment reducing the principal. This is standard practice for most mortgages, including those with balloon payments.
Interest calculations on a daily basis are more common in revolving credit contexts like credit cards or certain types of flexible loans, but not typically for mortgages, where monthly compounding based on annual rates is the norm.