A balloon mortgage is a short-term and fixed-rate mortgage that doesn't fully amortize over the loan term. The term of the loan is typically 5 or 7 years, and the interest is usually quite a bit lower than most loans. The buyer makes relatively small payments over the 5 or 7 year loan period, however, the final payment consists of the entire balance of the loan and is due at the end of the term. Since this final payment is substantial, it is called a balloon payment.
Our Balloon Mortgage Calculator computes the estimated monthly payment, the balloon payment, and the interest paid on the life of the loan. Balloon mortgages are not right for every borrower, use our calculator to help you determine if it is a good fit for you.
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