Balloon Mortgage Calculator
This mortgage calculator creates an amortization schedule that shows you how the principal balance on your balloon mortgage changes with each monthly payment. Balloon mortgages are not fully amortizing so a large balloon payment must be made at the end of the loan term. Some borrowers pay off their balloon mortgage by refinancing. However, there is a risk that they will not qualify for a refinance when the balloon payment is due. This can put them at risk of foreclosure if they don't have sufficient cash to make the payment.
Balloon mortgages generally offer borrowers a lower interest rate than corresponding fixed rate mortgages in return for the balloon payment requirement and the attendant refinance risk. They typically are amortized over 30 years and are due between 3 and 15 years. Some balloon mortgages allow interest-only payments before the balloon payment is due.
Balloon Mortgage Calculator - Help
- Amortization Schedule
- The amortization schedule show you how monthly principal and interest payment and principal balances change over the life of your loan.
- Balloon Term
- The Balloon term is the length of time after which the remaining principal balance on your mortgage is due. Mortgages usually have a balloon term that is the same as the amortization term. Your final payment for those mortgage may be slightly different. Mortgages where the balloon term is shorter than the amortization term are called balloon mortgages. These typically result in a very large final required payment and, thus, are much riskier mortgages.
- Interest
- The portion of your mortgage payment that is due to the interest rate being applied to the principal balance. The Total Interest for a mortgage is the sum of all interest paid over the life of a loan.
- Interest Rate
- The percentage of the principal balance of your mortgage that determines how much interest you must pay. The interest rate on your mortgage may change or remain the same depending on the type of loan you have.
- Loan Amount
- The initial principal balance or your mortgage at closing.
- Principal
- The portion of your mortgage payment that is used to pay down the current balance of your mortgage. The principal balance represents how much you owe on the mortgage.
- Term
- The amortization term is one of the key factors that determine your required mortgage payment. Your required mortgage payment for fully amortizing mortgages is the amount that would result in the mortgage being closest to being paid off by the end of the amortization term. Longer amortization terms result in lower required mortgage payments for fully amortizating mortgages, all other things being equal.