Balloon payment calculator

What is a balloon payment?

A large, one-time payment at the end of the loan term (CFPB). Monthly payments are figured as if the loan ran longer, so a big balance is still owed when the term ends.

How is the balloon calculated?

It is the balance left after the scheduled payments. $200,000 at 6% with payments set for 30 years costs $1,199.10 a month; after 7 years, $179,278.77 is still due.

Why choose a balloon loan?

Lower payments during the term. The risk is the lump sum at the end — many borrowers plan to sell or refinance, which may not be possible if prices or rates change.

Are balloon mortgages allowed?

The CFPB notes that balloon payments are not allowed in loans deemed Qualified Mortgages, with some limited exceptions.

How big is a balloon compared with the payments?

The CFPB describes a balloon payment as generally more than two times the loan’s average monthly payment — often far more. On the example the balloon is about 150 times the monthly payment.

How much of the loan is paid off before the balloon is due?

Very little, because early payments are mostly interest. On the example, seven years of payments total $100,724, but the balance only falls from $200,000 to $179,279: $20,721 of principal, 10.4% of the loan. The other $80,003 of what you paid is interest.

What happens if I cannot pay the balloon?

The CFPB warns that failing to make the final payment can lead to foreclosure, and that refinancing before it comes due may not be possible if the home’s value drops or your finances get worse. Ask the lender early what its options are, and do not count on a refinance as the only plan.

How the balloon is figured

The monthly payment is the ordinary fixed payment for the amortization period: P × r ÷ (1 − (1 + r)⁻ⁿ), with r the monthly rate (the annual rate ÷ 12) and n the number of months in the amortization, not the shorter loan term. The balloon is what remains after the payments actually made: the loan grown at the monthly rate for the months of the term, minus the payments grown the same way. That equals the balance on a fully amortizing schedule at that month. The calculator assumes a fixed rate, payments on time and no extra principal; any of these changes the real balance.

Worked example: $200,000 at 6%, 30-year schedule, 7-year balloon

The payment is figured on 360 months: $1,199.10 a month. After 84 payments, $100,724 has been paid in total and $179,278.77 is still owed, which is the balloon. Shortening the amortization shrinks it: on a 15-year schedule the payment is $1,687.71 and the balloon after 7 years is $128,427. The payment is higher, but much less of the loan is left to refinance.

Common mistakes

Do not confuse the amortization period with the loan term: the first sets the payment, the second sets when the balloon falls due. Do not assume the balloon is small because the payment looks affordable; the CFPB’s rule of thumb is only a floor. Plan for the lump sum from day one, with savings or a firm sale date. And do not expect a balloon on a Qualified Mortgage: it is generally barred, and the narrow exception in Regulation Z (12 CFR 1026.43(f)) requires, among other conditions, payments amortized over no more than 30 years, a rate that cannot increase, a term of at least five years, and an ability-to-repay check that leaves the balloon out.

Sources: CFPB, What is a balloon loan? (page reviewed August 28, 2026); Regulation Z, 12 CFR 1026.43, paragraphs (e)(2)(i) and (f) on balloon payments in Qualified Mortgages. The balance formula is the standard fixed-payment amortization formula used in the mortgage calculator. See also the loan payoff calculator, the refinance calculator and the interest-only mortgage calculator.

Estimates for planning only — not financial or tax advice. Your lender, plan or tax professional decides. How we check our calculators.