Balloon Payment Calculator (Interest-Only)
Calculate the lump-sum balloon payment due at the end of your interest-only loan term. Plan ahead for refinancing or payoff.
✓ Shows balloon amount at maturity
✓ Monthly IO payment breakdown
✓ Total interest paid over term
Interest-only note calculator
Calculate IO payments and balloon balance at maturity.
Understanding Balloon Payments
A balloon payment is a large lump sum due at the end of a loan term. In interest-only loans, the balloon is typically the entire original loan amount, since no principal was repaid during the interest-only period.
Example: $300,000 IO Loan with Balloon
Loan: $300,000 at 7% for 5 years (IO)
Monthly payment: $1,750 (interest only)
Total interest paid: $105,000
Balloon due at month 60: $300,000
Common Balloon Loan Strategies
- Refinance before maturity: Most borrowers refinance into a new loan before the balloon comes due
- Sell the property: Investors often plan to sell before the balloon date
- Pay off with savings: Some borrowers accumulate funds to pay the balloon in cash
- Negotiate extension: Some lenders allow a modification or extension at maturity
⚠️ Balloon Risk
If you can't refinance, sell, or pay the balloon at maturity, you could face default. Always have an exit strategy before taking a balloon loan.