Balloon Mortgage Calculator
The calculator gives you three calculation options: determine the amount of an annuity or determine the amount of the loan or determine the amount of the loan and the balloon amount.
- Enter monthly payment
Enter a monthly payment, an interest rate, an estimate of the years after which the balloon is due and a number of years to calculate the monthly payment (years in which the same monthly payments would pay off the loan). The calculator calculates the amount of the loan, the balloon amount and the amount of interest. - Entering the loan amount
Enter the amount of the loan, the interest rate, the number of years after which the balloon falls. You get the calculation of the monthly annuity, the balloon amount and the amount of interest. - Enter the amount of the loan and the balloon amount.
Enter the amount of the loan, the balloon amount, the interest rate and the period for the balloon. You get monthly annuities and the amount of interest.
When you press the “CALCULATE” button you get an Amortization schedule and two charts. The first one shows the distribution of the annuity on interest and the repayment to maturity of the balloon, the other the total of refunds, the return of the balloon and the total of the interest.
Would Be a Balloon Mortgage a Good Option for Me?
A balloon mortgage is usually a cheaper alternative to comparable types of loans. It has lower interest rates and smaller monthly payments than many other mortgage plans. Therefore, it is certainly a very tempting option for many home buyers. Especially for investors and those, who plan to sell their home before the mortgage term ends. It has many benefits, but it is also not without risks. So you have to be careful and consider all pros and cons before you choose what type of mortgage. This article and a good mortgage calculator can help you compare different loan plans and make a right decision.What is a balloon mortgage?
A balloon mortgage is a short-term loan that gets its name after a large ‘balloon’ final payment at the end of the mortgage term. Usually, the balloon mortgage term is 5, 7 or 10 years, but the regular monthly payments are amortized for a longer period of time. Monthly balloon payments are calculated as if the loan would be paid as standard 10-year to 30-year fixed mortgage, but the mortgage term is much shorter. Therefore, at the end, the balloon payment mortgage is not fully amortized or paid off. So after a relatively short time of regular monthly payments a significantly larger final ‘balloon’ payment is required.Lower interest rates than most other types of loans
The right type of mortgage can save you a lot of money and trouble. You have to know that every type of loan has different advantages. Absolutely the biggest advantage of a balloon mortgage is a lower interest rate compared to other options. Due to a large final payment at the end of a mortgage term, balloon mortgage monthly payments are also smaller and more affordable for your budget. Another benefit is that borrowers seeking a balloon mortgage may often get a larger mortgage amount that they would with other mortgage plans.
The right type of mortgage can save you a lot of money and trouble no doubt. Every type of loan has different advantages and that is why I always weigh the pros and cons of any mortgage before taking it just so you don’t have regrets later.