Monthly payment, the balloon due at the end, and total interest
Updated 2026-10-02
A balloon mortgage has payments sized as if the loan ran 30 years, but the remaining balance is due in one payment after a shorter period, often 5, 7 or 10 years. Enter the loan, rate, amortization and balloon date to see the monthly payment, the balloon you would owe and the interest paid along the way. See the full amortization schedule · test a refinance.
Your loan
Your balloon loan
Monthly payment
$1,995.91
for 7 years
Balloon payment due
$273,442
91% of the loan, due after payment 84
Principal repaid before the balloon
$26,558
Interest paid to the balloon date
$141,098
payment to clear the loan by then: $4,527.80
Estimates for planning, not a loan offer or financial advice. Every rate and cost here is a number you enter or an example you can change; confirm figures with your lender.
How the balloon payment is calculated
Payment = P × r ÷ (1 − (1 + r)−n) Balloon = P × (1 + r)k − Payment × ((1 + r)k − 1) ÷ r
P is the loan amount, r is the annual rate ÷ 12, n is the amortization period in months and k is the number of payments made before the balloon is due. The first line is the standard mortgage payment formula. The second is the balance left after k payments: what the loan would have grown to with no payments, minus what the payments and their interest have paid down. With interest-only payments the payment is P × r and the balloon is the full loan amount.
Worked example
A $300,000 loan at 7%, amortized over 30 years with a 7-year balloon, has a payment of $1,995.91. After 84 payments you have paid $167,656, but only $26,558 of that was principal. The balloon due is $273,442. To clear the same loan in 7 years with level payments would take $4,527.80 a month, which is why balloon loans can look affordable at first.
Balloon payments and the Qualified Mortgage rules
The Consumer Financial Protection Bureau explains that balloon payments are not allowed in a Qualified Mortgage, with some limited exceptions (page reviewed August 2026). The ability-to-repay rule in Regulation Z §1026.43 lists a balloon payment among the features a Qualified Mortgage cannot have, and §1026.43(f) allows small creditors to make balloon-payment Qualified Mortgages only with a term of 5 years or longer and payments calculated on an amortization period of no more than 30 years (rule current in 2026, after the General QM amendments with mandatory compliance from October 1, 2022). Balloon loans are more common in commercial, land and seller-financed deals.
Planning for the balloon date
Refinance risk. Most borrowers refinance before the balloon is due. Rates, home values and your credit at that date decide whether a new loan is available and what it costs.
Selling. If the home sells for less than the balloon plus selling costs, you need cash to close the gap.
Extra principal. Any extra principal you pay shrinks the balloon dollar for dollar. Try amounts in the extra payment calculator.
Compare the balloon payment with a standard loan in the mortgage calculator, or with an interest-only mortgage that resets instead of ending. Results are estimates for planning; your note and Loan Estimate show the actual terms.
Run the numbers like a pro
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The monthly payment is figured as if the loan ran for the full amortization period, usually 30 years. The balloon is the balance still owed when the balloon date arrives. On $300,000 at 7% amortized over 30 years with a 7-year balloon, the payment is $1,995.91 and the balloon after 84 payments is $273,442.
Why is the balloon payment so large?
Early payments on a long amortization are mostly interest, so little principal is repaid before the balloon date. In the example, 7 years of payments repay only $26,558 of principal, leaving 91% of the loan due at once.
Is a balloon mortgage a qualified mortgage?
Generally no. The CFPB states that balloon payments are not allowed in a Qualified Mortgage, with some limited exceptions. Regulation Z §1026.43(f) lets certain small creditors make balloon-payment Qualified Mortgages with a term of 5 years or longer and payments calculated on an amortization period of no more than 30 years.
How do people pay a balloon payment?
Usually by refinancing into a new loan, selling the property, or paying from savings before the due date. Refinancing depends on the rates, your credit and the home's value at that time, none of which are known when the loan is made.
What is an interest-only balloon loan?
Some balloon loans charge only interest until the balloon date, so no principal is repaid and the full loan amount is due at the end. On the example loan that is $1,750.00 a month and a $300,000 balloon.
