Finance · 103 calculators

A Balloon Payment Calculator

A balloon loan makes small payments for a few years and then demands the rest in one lump. The size of that lump is just the outstanding balance of an ordinary amortising loan on the balloon date.

Loan amountThe amount borrowed at the start.Annual interest rate(%)The quoted yearly rate. Divided by twelve for the monthly period rate.Amortisation termThe full schedule the payment is sized on, in months. 360 is a 30 year schedule.Balloon due afterHow many payments are made before the balance falls due, in months.

Monthly payment

$1,498.88

Balloon payment: $232,635.89
Principal repaid: $17,364.11
Total interest paid: $72,568.47
Share of the loan still owed: 93.05%

Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.

The formula this calculator uses

B = P x (1 + i)^n - PMT x ((1 + i)^n - 1) / i

B: The balloon payment, the balance still owed on the balloon date
P: The original loan amount
i: The interest rate per payment period, the annual rate divided by 12
n: The number of payments made before the balloon falls due
PMT: The regular payment, sized as if the loan ran its full term

How to check the result by hand

1
Convert the annual rate to a period rate
Divide the quoted annual rate by twelve for a monthly schedule. A 6 percent loan gives 0.005 per month. Use the period rate everywhere; mixing the annual rate with a monthly count is the single most common source of wrong answers.
2
Size the payment on the full amortisation term
Work out the level payment as though the loan ran to the end of its schedule. On 250,000 at 0.005 monthly over 360 months that is 1,498.88. This is the payment the borrower actually makes, even though the loan stops early.
3
Compound the original principal to the balloon date
Multiply the principal by one plus the period rate raised to the number of payments made. After 60 months that factor is 1.348850, so 250,000 grows to 337,212.53 on paper.
4
Work out the future value of the payments made
An annuity of 60 payments of 1,498.88 at 0.005 per month accumulates to 104,576.64. Subtract that from the compounded principal and the remainder is the balloon.
5
Read the result and sanity check it
The balloon is 232,635.89. Check it two ways: sixty payments totalling 89,932.80 retired only 17,364.11 of principal, and 17,364.11 added to 232,635.89 returns the original 250,000.

For worked examples, common mistakes and the limits of this formula, read the full How To Calculate A Balloon Payment page.