Earlier we published a home loan mortgage qualification calculator and now we have created this online calculator called Loan with Balloon Payment Calculator. Let us first understand, what is a balloon payment on a mortgage? A balloon loan is a kind of loan that includes a lump sum payment schedule at any point in the term, but usually at the end of the loan. Thus, you get a balloon loan mortgage on a property where you don’t need to pay the entire principal and interest through an equated monthly payment, but you need to pay a large final payment at the end of a period or before that time? This large payment explains your question “What is a balloon payment on a mortgage? “
Balloon Payment Mortgage Calculator
What is a balloon payment amortization schedule?
A balloon payment amortization schedule is a periodic table for equated monthly payments for a short term and then a large lump sum payment at the end of the loan. Since balloon mortgages expect a considerable amount of money after a short time, commercial real estate loans are most of the time of the nature of balloon loan.
The math behind loan with balloon payment calculator?
The Loan with Balloon Payment Calculator used following balloon payment formulas:
Pmt = (A * i * (1 + i)ⁿ) / ((1 + i)ⁿ - 1)
Pmt– monthly payment;
A– Loan amount;
i– periodic interest rate; and
n– number of periods.
B = (A * (1 + i)ⁿᵇ) - Pmt / i * ((1 + i)ⁿᵇ - 1)
B– Balloon payment; and
nb– Number of balloon loan periods
A balloon payment example
Here is a simple example to show how Loan with Balloon Payment Calculator works. Say you want to borrow a short term loan to finance repairing or improvement of your house, so you ask the financier for a loan that you expect to pay in 5 years. He offers you a balloon payment mortgage loan
Loan amount = $500,000;
Amortization period = 20 years;
Balloon payment after = 5 years; and
Interest rate = 6.5%.
So, when you put aforesaid data in our balloon calculator, you see following results :
- MONTHLY PAYMENT $3,727.87
- TOTAL MONTHLY PAYMENTS $223,672.20
- TOTAL AMOUNT PAID $651,618.30
- TOTAL INTEREST$151,618.30
- BALLOON PAYMENT $427,946
If ypou liked Loan with Balloon Payment Calculator , try our mortgage payoff calculator with payment schedule?