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Balloon Payment Calculator

Created by Tibor Pál, PhD candidate
Reviewed by Dominik Czernia, PhD and Jack Bowater
Based on research by
Cipra T. Financial and Insurance Formulas; 2006
Last updated: Jan 18, 2024

The balloon payment calculator is a loan calculator with a balloon payment that helps you to estimate the monthly fixed instalment and the final balloon payment of a given balloon loan construction. Moreover, you can check the monthly or yearly balances in the amortization schedule with the balloon payment at the end of the repayment term given. Please check out our loan repayment calculator and loan calculator to understand more on loans.

Read on to learn what is a balloon payment, how to calculate balloon payment and to see a balloon payment example as well. Also, we explain what is balloon mortgage so you can use the tool as a balloon mortgage calculator as well!

What is a balloon payment definition?

A balloon loan is a loan construction that typically has a relatively short repaymentterm and only a fraction of the loan's principal balance is amortized over that period.

In other words, the fixed payments due monthly don't cover the loan amount and the accrued interest. Therefore, the borrower is required to make a large final payment at the end of the loan term, which refers to the balloon payment. You can use our amortization calculator to facilitate your calculation on this topic.

balloon payment - a house with balloon attached to it

What is a balloon mortgage?

A balloon mortgage is a type of loan repayment option with a short term and a large lump sum payment due at the end of the loan. As we mentioned, the balloon payment is the final payment which pays off the remaining balance after the last period of the monthly payment. Since the monthly fixed payment is computed with a more extended, usually 20-30 year amortization schedule, the balloon mortgage doesn't fully amortize.

Since balloon mortgages expect a considerable amount of money after a short time, it typically relates to businesses which can afford such a loan construction. Such loans are, for example, commercial real estate loans which allow investments for the renovation of buildings or the purchasing of a commercial property for expansion.

How to calculate balloon payment of a loan?

As a first step, we need to find the monthly fixed payment. For that, we can employ the following balloon payment formulas:

Pmt = (A × i × (1 + i)n) / ((1 + i)n - 1),


  • Pmt – monthly payment;
  • A – Loan amount;
  • i – periodic interest rate; and
  • n – number of periods.

When we find the monthly payment, we can compute the balance due after the term of a balloon loan.

B = (A × (1 + i)nb) - Pmt / i × ((1 + i)nb - 1),


  • B – Balloon payment; and
  • nb – Number of balloon loan periods.

How to use the balloon payment calculator - a balloon payment example

Finally, let's see how the balloon payment calculator works with an example.

Let's say that Jack found a house with a very competitive price of 100,000 dollars. Since he is planning to move to another city in 5 years, he decides to take a balloon mortgage with 30 years term, which has 7 percent interest rate. How much money should Jack sell his house for after five years to be able to make the last balloon payment mortgage?

After filling out our balloon payment calculator with the information in this example, we will receive all the necessary details immediately.

  • Loan amount = $100,000;
  • Amortization period = 30 years;
  • Balloon payment after = 5 years; and
  • Interest rate = 7%.

Jack will have to pay $665.30 over five years and then pay $94,131.59. This means Jack needs to sell the house above this amount.


You should consider the balloon payment calculator as a model for financial approximation. All payment figures, balances, and interest figures are estimates based on the data you provided in the specifications that are, despite our best effort, not exhaustive.

For this reason, we created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive useful feedback and advice.


What is a balloon payment?

A balloon payment is a large, one-time payment made at the end of a loan term. It's much bigger than the regular, smaller payments made throughout the loan. This type of payment is often used in mortgage or business loans, where smaller payments are made initially, and a large sum is paid at the end to clear the debt. Balloon payments can lower initial loan costs, but require careful financial planning due to the large sum required at the end.

How do I calculate a balloon payment?

To calculate a balloon payment, you can follow these steps:

  1. Identify Loan Amount: Determine the total amount of the loan.
  2. Calculate Regular Payments: Figure out your regular loan payments using the loan amount, interest rate, and loan term, excluding the balloon payment period.
  3. Subtract Total Regular Payments: Add up all the regular payments you will have made by the time the balloon payment is due and subtract this from the original loan amount.
  4. The Remaining Balance: The remaining balance after subtracting the total regular payments from the loan amount is your balloon payment.

What is an example of a balloon payment?

An example of a balloon payment is when someone takes a mortgage with low monthly payments for 5 years, and then, at the end of these 5 years, they must make a large final payment to fully repay the loan. For instance, if they borrow $100,000, they might pay small amounts each month and then have a balloon payment of $80,000 at the end of the term to settle the loan completely. This large sum at the end is the balloon part of the loan.

Is $10,000 balloon payment a lot?

Whether $10,000 is considered a lot depends on several factors:

  • The loan size and terms: $10,000 might be a lot or a little compared to the total loan amount and terms.
  • Individual financial situation: For some borrowers, $10,000 could be a manageable sum, while for others, it might be a significant financial burden.
  • Interest Rates and Market Conditions.

So, the answer varies based on the specific circumstances of the loan and the borrower's financial situation.

How big is the balloon payment for a $50,000 loan at 5% after 2 years in a 5-year loan?

The balloon payment for a $50,000 loan at 5% after 2 years in a 5-year loan is $31,482.60. Each month, you pay $943.56; after 2 years, you'll need to pay the remaining balance, which is the balloon payment. Total repayment will be $54,128.08.

Tibor Pál, PhD candidate
Related calculators
Loan specifications
Loan amount
Amortization period
Balloon payment after
Interest rate
Your fixed monthly payment is $1,550.60 in the first 5 years, and then your last balloon payment will be $172,513.25.
Thus, your total repayment amount is $265,549.12, from which the total monthly payment is $93,035.87, including a total interest payment of $65,549.12.
Chart of balances
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