Amortization Schedule With Balloon Payment Calculator

An amortization schedule with a balloon payment shows how each scheduled payment is divided between interest and principal, then shows the large remaining balance due at the end. Enter the loan amount, annual APR, and term to estimate the regular monthly payment, the balloon balance, and total interest using a fixed-rate, monthly-payment model.

Formula

This calculator uses a standard fixed-rate amortization formula to set a level monthly payment as if the balance were paid off over the stated term. The balloon is the principal balance left after the final scheduled payment. In symbols:

• Monthly rate: r = APR / 1200, where APR is the entered annual percentage rate in percent.
• Number of scheduled payments: n = 12 × years.
• Monthly payment: PMT = round[P × r / (1 − (1 + r)⁻ⁿ), 2].
• Balloon balance: B = P(1 + r)ⁿ − PMT × [(1 + r)ⁿ − 1] / r.
• Total interest paid and due: I = n × PMT + B − P.

P is the original loan principal in dollars; APR is the annual rate entered as a percentage; r is the monthly rate as a decimal; n is the number of monthly payments; PMT is the payment in dollars, rounded to cents; B is the remaining balance due in dollars; and I is estimated total interest in dollars. Because the regular payment is rounded to cents, the schedule can leave a small difference from a calculation that retains unrounded payments.

Worked Example

Using the calculator’s default inputs—$20,000 principal, 8% APR, and five years—the schedule has 60 monthly payments. The monthly rate is 8 / 1200 = 0.0066667.

1. Calculate the unrounded payment: $20,000 × 0.0066667 / [1 − (1.0066667)⁻⁶⁰] ≈ $405.527.
2. Round the monthly payment to cents: $405.53.
3. Apply the balance formula after 60 payments: $20,000(1.0066667)⁶⁰ − $405.53 × [(1.0066667)⁶⁰ − 1] / 0.0066667 ≈ $0.26.
4. Total interest, including that remaining balloon: 60 × $405.53 + $0.26 − $20,000 = $4,332.06.

The small final balance is a rounding effect: the level payment is rounded to cents, while the formula compounds the balance monthly. A real contract may set the final amount differently, according to its payment dates, rounding method, and terms.

Assumptions

• The APR is fixed for the entire modeled term.
• Payments are monthly, made at the end of each monthly period.
• Interest compounds monthly at APR / 12.
• The estimate excludes fees, taxes, insurance, PMI, escrow, late charges, and any other amounts not entered.

How a Balloon Amortization Schedule Works

A conventional fully amortizing loan is structured so level payments reduce the balance to zero by the end of its term, subject to rounding. A balloon loan instead has scheduled payments calculated over a longer amortization period or otherwise set below the amount needed to clear principal by the maturity date. The unpaid amount comes due as a balloon payment.

Each row in a schedule generally shows the opening balance, payment, interest charged for the period, principal repaid, and closing balance. For a monthly schedule, interest is approximately the opening balance multiplied by the monthly rate. The principal part is the payment minus that period’s interest. Early in a loan, interest usually makes up a larger share of a level payment; as principal falls, the interest portion generally declines.

This page’s simplified model makes the scheduled payment as though the loan amortizes fully over the entered term. Therefore, its balloon is usually only a small rounding residual. To model a typical balloon structure where payments are based on a longer amortization period than the time until the balloon is due, the payment and balloon date must be modeled separately. The calculator does not have a separate amortization-period input, so do not treat its payment estimate as a contract quote for that structure.

Reading the Results and Building a Schedule

The monthly payment is the modeled amount due each month before any excluded costs. The balloon balance is the remaining principal after the final scheduled payment, not an extra monthly payment. Total interest includes interest embedded in the regular payments and interest represented by the amount still owed at the end; it is not the same as the total of all cash payments.

For a more detailed schedule, calculate each month in sequence:

1. Start with the opening balance.
2. Multiply it by the monthly rate to estimate that month’s interest.
3. Subtract interest from the scheduled payment to find principal repaid.
4. Subtract principal repaid from the opening balance to get the closing balance, which becomes the next month’s opening balance.

The last closing balance is the estimated balloon. Actual statements may differ because of daily interest, payment dates, payment rounding, rate changes, fees, or contract-specific payment allocation.

When to Use This Estimate and Its Limits

Use the calculation to understand the basic relationship among principal, APR, term, monthly payment, and a remaining balance. It can help you inspect a proposed payment schedule or check the arithmetic in an illustrative example, provided the loan matches the model assumptions. Enter the contractual APR and term only after confirming their definitions and units; APR is entered as a yearly percentage, while the formula converts it to a monthly rate.

A balloon amount can create a substantial maturity-date obligation, but this calculator cannot establish how that obligation will be handled or what funds will be available then. Refinancing, selling an asset, or paying from savings involve circumstances and terms outside the formula. The calculator also does not determine qualification, future rates, taxes, legal obligations, or the exact amount due on a particular date. Get the actual payment schedule and maturity payoff figure from the lender or loan documents.

Common Errors and Related Questions

• Confusing APR with a monthly rate: enter an annual percentage such as 8, not 0.08 or a monthly rate. The expression divides the APR by 1200.
• Confusing term with amortization period: in many balloon arrangements, the period used to calculate regular payments differs from the time until the final balance is due. This calculator uses one term for both.
• Assuming total interest is the balloon: total interest is the cost of borrowing in this model; the balloon is unpaid principal remaining at maturity.
• Ignoring payment rounding: cents-level rounding accumulates across many periods and can leave a small residual even in a nominally fully amortizing example.

Frequently Asked Questions

What is an amortization schedule with a balloon payment?
An amortization schedule lists how payments are allocated between interest and principal over time and identifies the unpaid balance due at maturity as a lump sum. The size of that final amount depends on the payment calculation, rates, timing, and loan terms.

How do I calculate a balloon payment?
For a fixed monthly rate, calculate the balance after the scheduled payments using the remaining-balance formula: original principal compounded for the payment count, minus the accumulated value of the payments. The estimate above rounds each regular payment to cents.

Is the balloon payment included in the monthly payment?
No. It is generally a separate amount due at the end of the stated loan period. The monthly payment and any final balloon should be shown separately in a schedule or loan disclosure.

Why does this calculator show almost no balloon?
Its payment formula is based on paying the balance off over the same term used to calculate the balloon date. A tiny remainder may result from rounding. A larger balloon model needs a separate amortization period or a specified regular payment.

Does the result include fees or escrow?
No. The calculator models principal and interest only. Fees, taxes, insurance, escrow, and other contract charges are excluded unless incorporated separately in the figures you are reviewing.

This result is an estimate, and the lender’s disclosure gives the exact figures.

Related

• Interest Rate Trends: How Rates Change Over Time
• Interest Rate Table Calculator and Loan Payment Formula
• Interest Rate to APY Calculator: Convert and Compare

in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)), 2) | 2
out bal | Balloon balance at term | $ | p * (1 + apr / 1200) ^ (yrs * 12) - pmt * ((1 + apr / 1200) ^ (yrs * 12) - 1) / (apr / 1200) | 2
out int | Total interest paid and due | $ | pmt * yrs * 12 + bal - p | 2