Balloon Mortgage Calculator

Table of Contents

Calculate your mortgage payment by adding the value of balloon payments to an adjustable-rate mortgage. This calculator is designed for a 30-year fixed rate loan, but you can modify it as needed with different numbers and graphs.

The “5 year balloon mortgage calculator” is a tool that allows users to calculate their monthly payments for a 5-year loan. The calculator makes it easy to find out how much you will pay in interest and principal, as well as the total cost of the loan.

A balloon mortgage is a loan with modest monthly payments for the first few years, but subsequently a considerable amount of the debt is returned in one big sum at the conclusion of the term. A balloon mortgage calculator will help you figure out your monthly mortgage payment, Payment via Balloon, and total interest paid over the life of the loan.

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How Does the Payment Calculator for Balloons Work?

The Payment via Balloon calculator works by taking the information you provide, such as your property price, and calculating your monthly payment on your balloon mortgage using an amortization schedule and a Payment via Balloon formula. It will also inform you of the amount of your Payment via Balloon at the conclusion of the loan. You should be able to assess if a balloon mortgage is right for you after using the free balloon mortgage calculator.

A balloon mortgage is a loan with a 30-year amortization period but a loan duration of five to seven years. A Payment via Balloon, which is a lump amount made up of a big chunk of the principal balance, is payable at the conclusion of the loan period. Our balloon loan calculator will run the calculations for you and calculate the amount of your Payment via Balloon.

A 30-year amortization schedule and your interest rate are used to compute the Monthly Payment on a Balloon Mortgage. After you’ve completed all of your monthly payments, the remaining principle due determines your final Payment via Balloon. This is a one-time payment required at the conclusion of the loan term.

Here’s some information to assist you evaluate your Payment via Balloon calculator results:

Interest rates for balloon mortgages are typically 4.5 to 5.5 percent.
The length of a typical balloon loan is 5 to 7 years.
Payment via Balloon: The whole amount due on the loan at the conclusion of the term in one big sum.

Inputs for the Balloon Mortgage Calculator

You will be asked to enter your house price, down payment, mortgage amount, duration, and interest rate while using our free balloon mortgage calculator. The balloon mortgage payment calculator requires these information in order to calculate things like your monthly payment. For its computations, the balloon mortgage calculator employs a Payment via Balloon formula based on an amortization plan with a balloon.

The following are the information for each entry into the Payment via Balloon mortgage calculator:

Property Values

The balloon mortgage calculator’s first input is the value of your house. This is the purchase price of your home, which is the amount you paid for it. Keep in mind that this isn’t the current value of the property. This number will appear on your agreement of sale if you’re thinking about buying a house. The purchase price will be shown on your HUD-1 settlement statement, which is part of your closing documentation, if you already own the property.

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Property Down Payment

The down payment is the amount of cash you put down on the property. It’s the piece of the project that you didn’t fund. For example, if you paid $100,000 for a home and financed 80% of it, your down payment would be 20%, or $20,000. The amount of your down payment may be found on your purchase agreement and your HUD-1 statement.

A 10% down payment is often needed for a balloon mortgage. Your balloon mortgage lender will be able to inform you what your minimal down payment is if you haven’t yet acquired the home.

Investment Property Mortgage Amount

The mortgage amount is the next item to enter into the balloon loan calculator. This is the total amount you’re borrowing to buy the house. A balloon mortgage will often finance 90% or more of the purchase price. For instance, if the property’s purchase price is $100,000 and you put down $10,000 as a down payment, your mortgage will be $90,000.

Your mortgage amount may be found on your mortgage statement, by calling your lender, or by logging into your online mortgage account. Your mortgage amount will be on the mortgage paperwork that you signed if you preserved your closing documents.

Term of a Balloon Mortgage Loan

A Term of a Balloon Mortgage Loan is the length of the balloon mortgage. Typically, balloon mortgage terms are five to seven years. However, some lenders will fund balloon mortgages with terms up to 15 years. You can find your loan term on your mortgage documents from settlement and on your mortgage statement. If you’re shopping around for a balloon mortgage, the lenders will tell you what terms they offer.

Balloon Mortgage Interest Rates

A balloon mortgage often has a lower interest rate than a conventional loan. Balloon mortgage rates typically range from 4.5 percent to 5.5 percent. Your interest rate may be found on your mortgage documentation from closing, or you can ask your lender for it. Don’t worry if you don’t recall your specific rate; our calculation assumes a 5% average rate.

Outputs of the Payment via Balloon Calculator

After you’ve entered all of the essential information into the balloon mortgage calculator, such as your home’s price and interest rate, the calculator will compute the figures for you and show you your Monthly Payment on a Balloon Mortgage, Payment via Balloon, and total interest paid.

The Payment via Balloon calculator does these calculations using your inputs and a built-in amortization formula based on a 30-year period. You won’t have to make any calculations by hand or look for an amortization table online if you use our free balloon mortgage calculator.

Outputs of the Payment via Balloon Calculator include:

Monthly Payment on a Balloon Mortgage

Our balloon loan calculator estimates your monthly mortgage payment as the first result. This is the total amount of interest and principle you will pay each month for the duration of the loan. This computation is done using your interest rate and is amortized over 30 years. Knowing your monthly mortgage payment can assist you in determining if a balloon mortgage is a suitable choice for you. You may use an interest-only balloon loan instead of a principle and interest loan if you have one.

Payment via Balloon

Next, our balloon mortgage payment calculator calculates your Payment via Balloon. This is the lump sum due at the end of the loan term. It’s when the majority of your principal will be due because during the beginning of the loan term you were paying mostly interest and just a small amount of principal.

The Payment via Balloon is the most important calculation because it dictates whether or not you can afford to get a balloon mortgage. You need to be able to sell the property and pay off this Payment via Balloon, or you need to refinance the mortgage or pay it off with a lump sum. By using our free balloon mortgage calculator, you will find out how much the Payment via Balloon will be and then be able to plan an exit strategy. Some people may also plan on refinancing, and the monthly payment would be a larger indicator of affordability.

Total Balloon Mortgage Interest Paid

The total interest paid throughout your balloon mortgage is the final result of the balloon mortgage calculator. This computation is based on your interest rate, loan length, and loan amortization. You’ll be able to calculate your total interest and compare it to what you’d pay if you took out a different sort of loan.

When Should a Balloon Mortgage Be Used?

Real estate investors and owner-occupants who plan to sell or refinance within two to three years may employ a balloon mortgage. A balloon mortgage is also used by investors and owner-occupants who want to buy a home but can’t afford it with a conventional loan. Because the loan period is generally five to seven years, but the loan is repaid over 30 years, the balloon mortgage often has modest initial monthly mortgage payments. This makes it a more cost-effective alternative at the start of the loan.

However, a lump sum payment is due at the end of the loan term, so investors should only choose a balloon mortgage if they know they will be able to afford this Payment via Balloon. Some risks involved with using a balloon mortgage include changing property values, interest rate changes and personal income changes. Typically, investors, who plan to sell a property, know they will inherit a lump sum or who will receive a large bonus or salary increase will opt for a balloon mortgage.

When you need to borrow money quickly, a balloon mortgage is a fantastic choice.

An investor with a clear exit strategy in mind to repay the Payment via Balloon, such as selling the property, paying it off or refinancing the loan
A commercial real estate investor wants initial low payments so he or she can increase cash flow and refinance the property before the Payment via Balloon is due
A buy-and-hold investor who intends to sell or refinance the property before the balloon is due to take advantage of a cheaper interest rate and monthly payment.
An owner-occupant who wants to purchase a property he or she wouldn’t otherwise qualify for and knows he or she will have the funds to cover the Payment via Balloon
An investor who wants to rehab a rental property in an up-and-coming area and sell it for a profit before the Payment via Balloon is due

Balloon Mortgage Alternatives

A balloon mortgage is a good choice for someone who wants to take advantage of cheap monthly payments at first but is willing to pay a lump amount at the conclusion of the loan term. Balloon mortgages, on the other hand, are a niche credit type that isn’t commonly available. There are various options if you can’t locate a balloon mortgage lender or decide that a balloon mortgage isn’t suited for you.

Balloon Mortgage Alternatives include:

Adjustable rate mortgage (ARM): An ARM is a form of mortgage in which the interest rate is initially fixed for a specified period of time and then resets after that period of time has passed. ARMs are commonly 5/1 or 7/1, which means they’re fixed for 5 or 7 years and then adjust once a year for the remainder of the loan; ARMS are frequently utilized by investors and owner-occupants to pay reduced interest during the loan’s first term.
Investment property loan: This form of loan is designed exclusively for investors and is available through banks, credit unions, and internet lenders; rates range from 5% to 12%, with maturities ranging from 3 to 30 years; investors often utilize these loans to acquire buy-and-hold properties.
Investors use hard money loans to repair and flip properties or rehab, refinance, and rent out a property; rates are normally 7 to 13 percent and maturities are six months to two years; investors use these loans to fix and flip properties or rehab, refinance, and rent out a property.
Investors use a jumbo loan to acquire a luxury property, a 1-4 unit building, or a property in a high-cost location; owner-occupants use a jumbo loan to purchase a main house in a high-cost area or a luxury home.

Final Thoughts

A Payment via Balloon calculator is a helpful tool used to assist an investor in deciding if a balloon mortgage is right for them. After putting inputs into the balloon mortgage payment calculator like your home price, down payment and mortgage amount, the balloon mortgage payment calculator does the work for you. The Payment via Balloon calculator calculates your monthly mortgage payment, amount of your Payment via Balloon and the total amount of interest paid during the loan.

Check out Kiavi if you’re an investor searching for a balloon mortgage. It’s a national online lender with a simple application procedure that can get you prequalified in a matter of minutes. For prime borrowers, its rates are competitive.