How is a balloon payment calculated?

It is the loan balance remaining after the regular payments: B = L(1 + r)n − P × [(1 + r)n − 1] ÷ r, with n the number of payments made before the balloon is due.

How do I find the monthly payment when the balloon is fixed?

Subtract the present value of the balloon from the loan amount and apply the ordinary loan payment formula to the rest.

Why is my balloon so large?

Early payments on a long amortization are mostly interest, so little principal is repaid in the first years.

Is the last regular payment included in the balloon?

No. The balloon is due in addition to the final regular payment.

Balloon Payment Formula and Calculator

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Balloon Loan Payment Calculator

A balloon loan has regular payments that do not fully repay the loan, leaving a large final payment, the balloon, due at the end of the term. Commercial mortgages, some car finance plans and bridging loans are structured this way: payments are often sized as if the loan ran 25 or 30 years, but the whole remaining balance falls due after 5 or 7 years.

Formula

P = [L − B ÷ (1 + r)ⁿ] × r1 − (1 + r)⁻ⁿ B = L(1 + r)ⁿ − P × (1 + r)ⁿ − 1r

Where

P: regular payment per period
L: loan amount
B: balloon: the lump sum due with the last regular payment
r: interest rate per period
n: number of regular payments before the balloon is due

Calculator

What do you want to find?

Loan amount (L)

Annual interest rate (%)

Years until the balloon is due

Amortization period (years)

Used when finding the balloon: payments are sized as if the loan ran this long.

Balloon amount (B)

Used when finding the payment.

Payments per year

Result and step-by-step solution

Balloon payment due

180,832.49

Regular payment 1,264.14, due after 84 payments. Total interest 87,019.92.

Rate per period and payments before the balloon
r = 6.5% ÷ 12 = 0.00541667; n = 84
Payment based on the 30-year amortization (360 payments)
P = 200,000.00 × 0.005416671 − (1 + 0.00541667)⁻³⁶⁰ = 1,264.14
Balance still owed after 84 payments
B = 200,000.00 × 1.57423925 − 1,264.14 × 1.57423925 − 10.00541667 = 180,832.49
Totals
1,264.14 × 84 + 180,832.49 = 287,019.92 paid; interest = 87,019.92

How to use the formula

The calculator works in two directions. To find the balloon, it first sizes the payment on the amortization period and then computes the balance still owed when the balloon falls due, B = L(1 + r)ⁿ − P × [(1 + r)ⁿ − 1] ÷ r. To find the payment for a balloon you already know, it subtracts the present value of the balloon from the loan and amortizes the rest: P = [L − B ÷ (1 + r)ⁿ] × r ÷ [1 − (1 + r)⁻ⁿ].

In the default example a 200,000 loan at 6.5% is paid as if over 30 years, 1,264.14 a month, but the balance is due after 7 years: the balloon is 180,832.49. Most of the early payments are interest, which is why the balloon is so large. Borrowers usually plan to refinance or sell before the balloon date; see the remaining balance formula for any other date.

Frequently asked questions

How is a balloon payment calculated?: It is the loan balance remaining after the regular payments: B = L(1 + r)ⁿ − P × [(1 + r)ⁿ − 1] ÷ r, with n the number of payments made before the balloon is due.
How do I find the monthly payment when the balloon is fixed?: Subtract the present value of the balloon from the loan amount and apply the ordinary loan payment formula to the rest.
Why is my balloon so large?: Early payments on a long amortization are mostly interest, so little principal is repaid in the first years.
Is the last regular payment included in the balloon?: No. The balloon is due in addition to the final regular payment.

Last reviewed: September 26, 2026. Calculations run in your browser and were checked against numpy-financial, SciPy and published spreadsheet examples.