Balloon Loan Payment: $500K at 7%, 10-Year Balloon
Calculate monthly payments and the balloon balance due at the end of 10 years on a $500,000 loan at 7%.
How to use this tool
- Enter the loan amount and interest rate.
- Enter the amortization schedule (the long period that sizes the payment).
- Enter the balloon term (when the balance comes due).
- Read the monthly payment and the balloon amount you must refinance or pay off.
Find the monthly payment and 10-year balloon payoff amount on a $500,000 loan at 7% interest.
Frequently asked questions
- Why is the balloon payment so large?
- Payments are sized over a long amortization schedule, so early payments are mostly interest and the principal barely drops. When the short term ends, most of the original balance remains and is due at once.
- What happens if I can't pay the balloon?
- Borrowers usually refinance into a new loan, sell the asset, or pay the lump sum from savings. If none of those is possible, the loan can go into default, so plan an exit before the balloon date.
- How is the balloon balance calculated?
- Project the balance forward: B = P × (1+r)^n − M × ((1+r)^n − 1) ÷ r, where n is the number of payments made and M is the monthly payment from the amortization schedule.