30/7 Balloon Mortgage Amortization Example

Balloon Mortgage

In this example, we will compare two mortgages for \$90,000. The first is a 30/7 balloon mortgage. It is amortized over 30 years. The balloon payment is due in 7 years. Its interest rate is fixed at 4%. The next mortgage is a 30 year fixed rate mortgage at 5%.

After reviewing this example, enter your desired mortgage terms into the balloon mortgage calculator to help you decide which mortgage best meets your needs.

Balloon Payment: \$77,883
(Month 84)

The balloon mortgage has a minimum monthly principal and interest payment of \$430. This saves the borrower \$53 per month when compared to the 30 year fixed. However, the 30/7 has a balloon payment of \$77,883 due in 84 months. The borrower will have to compare the monthly savings of \$53 for 84 months with absorbing the significantly higher risk of the balloon mortgage, including the refinance risk, the interest rate risk and risk of not being able to sell the home at a high enough price if they must raise the cash that way.

MonthPrincipal
Interest
Payment
InterestPrincipalBalance
1\$430\$300\$130\$89,870
2\$430\$300\$130\$89,740
3\$430\$299\$131\$89,610
4\$430\$299\$131\$89,479
5\$430\$298\$131\$89,347
6\$430\$298\$132\$89,215
7\$430\$297\$132\$89,083
8\$430\$297\$133\$88,950
9\$430\$296\$133\$88,817
10\$430\$296\$134\$88,684
11\$430\$296\$134\$88,549
12\$430\$295\$135\$88,415
Year 1\$5,156\$3,571\$1,585
13\$430\$295\$135\$88,280
14\$430\$294\$135\$88,145
15\$430\$294\$136\$88,009
16\$430\$293\$136\$87,872
17\$430\$293\$137\$87,736
18\$430\$292\$137\$87,598
19\$430\$292\$138\$87,461
20\$430\$292\$138\$87,323
21\$430\$291\$139\$87,184
22\$430\$291\$139\$87,045
23\$430\$290\$140\$86,905
24\$430\$290\$140\$86,765
Year 2\$5,156\$3,507\$1,650
25\$430\$289\$140\$86,625
26\$430\$289\$141\$86,484
27\$430\$288\$141\$86,343
28\$430\$288\$142\$86,201
29\$430\$287\$142\$86,058
30\$430\$287\$143\$85,916
31\$430\$286\$143\$85,772
32\$430\$286\$144\$85,629
33\$430\$285\$144\$85,484
34\$430\$285\$145\$85,340
35\$430\$284\$145\$85,194
36\$430\$284\$146\$85,049
Year 3\$5,156\$3,439\$1,717
37\$430\$284\$146\$84,902
38\$430\$283\$147\$84,756
39\$430\$283\$147\$84,609
40\$430\$282\$148\$84,461
41\$430\$282\$148\$84,313
42\$430\$281\$149\$84,164
43\$430\$281\$149\$84,015
44\$430\$280\$150\$83,865
45\$430\$280\$150\$83,715
46\$430\$279\$151\$83,565
47\$430\$279\$151\$83,414
48\$430\$278\$152\$83,262
Year 4\$5,156\$3,369\$1,787
49\$430\$278\$152\$83,110
50\$430\$277\$153\$82,957
51\$430\$277\$153\$82,804
52\$430\$276\$154\$82,650
53\$430\$276\$154\$82,496
54\$430\$275\$155\$82,341
55\$430\$274\$155\$82,186
56\$430\$274\$156\$82,030
57\$430\$273\$156\$81,874
58\$430\$273\$157\$81,717
59\$430\$272\$157\$81,560
60\$430\$272\$158\$81,402
Year 5\$5,156\$3,297\$1,860
61\$430\$271\$158\$81,244
62\$430\$271\$159\$81,085
63\$430\$270\$159\$80,926
64\$430\$270\$160\$80,766
65\$430\$269\$160\$80,605
66\$430\$269\$161\$80,444
67\$430\$268\$162\$80,283
68\$430\$268\$162\$80,121
69\$430\$267\$163\$79,958
70\$430\$267\$163\$79,795
71\$430\$266\$164\$79,631
72\$430\$265\$164\$79,467
Year 6\$5,156\$3,221\$1,935
73\$430\$265\$165\$79,302
74\$430\$264\$165\$79,137
75\$430\$264\$166\$78,971
76\$430\$263\$166\$78,805
77\$430\$263\$167\$78,638
78\$430\$262\$168\$78,470
79\$430\$262\$168\$78,302
80\$430\$261\$169\$78,133
81\$430\$260\$169\$77,964
82\$430\$260\$170\$77,794
83\$430\$259\$170\$77,624
84\$77,883\$259\$77,624\$0
Year 7\$82,609\$3,142\$79,467
Grand
Total
\$113,546\$23,546\$90,000

Balloon Mortgage Calculator - Help

Amortization Schedule
The amortization schedule show you how monthly principal and interest payment and principal balances change over the life of your loan.
Balloon Term
The Balloon term is the length of time after which the remaining principal balance on your mortgage is due. Mortgages usually have a balloon term that is the same as the amortization term. Your final payment for those mortgage may be slightly different. Mortgages where the balloon term is shorter than the amortization term are called balloon mortgages. These typically result in a very large final required payment and, thus, are much riskier mortgages.
Interest
The portion of your mortgage payment that is due to the interest rate being applied to the principal balance. The Total Interest for a mortgage is the sum of all interest paid over the life of a loan.
Interest Rate
The percentage of the principal balance of your mortgage that determines how much interest you must pay. The interest rate on your mortgage may change or remain the same depending on the type of loan you have.
Loan Amount
The initial principal balance or your mortgage at closing.
Principal
The portion of your mortgage payment that is used to pay down the current balance of your mortgage. The principal balance represents how much you owe on the mortgage.
Term
The amortization term is one of the key factors that determine your required mortgage payment. Your required mortgage payment for fully amortizing mortgages is the amount that would result in the mortgage being closest to being paid off by the end of the amortization term. Longer amortization terms result in lower required mortgage payments for fully amortizating mortgages, all other things being equal.