Refinance Calculator
Current Mortgage
New Mortgage

Refinancing saves you
a balloon payment of


due in 10 years

Lifetime Savings($152,309)
Monthly Savings($37)
Refinance Costs$4,500
New Payment$981
This refinance would avoid a required balloon payment of $95,397 10 years from now. The new fixed rate mortgage could actually cost the borrower $152,309 more after 25 years! However, many borrowers could consider this refinance to be beneficial since they may not have the cash reserves to make the balloon payment and the true beneift of the refinance may be avoiding possible foreclosure or being forced to sell their home.

Refinance Summary

Principal Balance$4,500
Interest Rate0.000%
Monthly Payment
(Principal and Interest)
# of Remaining Monthly Payments180
Total Remaining Payments
(Principal and Interest)
Total Remaining Interest$82,064

Refinance Balloon Mortgage To Fully Amortizing Mortgage

Balloon mortgages are very risky due to the large payments that can be required at the end of the mortgage. In this example, we look at a borrower who has paid 5 years of a ballon mortgage of $120,000 that is amortized over 30 years and that requires a balloon payment in 15 years. He is concerned about not being able to make the balloon payment, so he applies for a refinance and is offered the same interest rate, 8.75%, on a 25 year fixed rate mortgage

Use the refinance calculator to see how a refinance could benefit you.

Refinance Calculator

Refinance Fixed

ARM to Fixed Rate

Balloon to Fully Amortizing

Interest-Only To Fully Amortizing

Refinance Calculator Examples

No Cash-Out Refinance

Break-Even On Refinance In 1 Year

Break-Even In Less Than 5 Years

Never Break-Even

Refinance To Reduce Risk

ARM to Fixed Rate

Interest-Only to Fully Amortizing

Balloon to Fully Amortizing

Refinance Calculator - Help

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.
The break-even point is the amount of time it will take for your mortgage savings to equal the amount you paid up front. The break-even point for your refinance is the amount of time it will take for your refinance savings to equal the cost of your refinance. The break-even for paying discount points is the amount of time it will take for your savings to equal the amount you paid for points
Cash Out
The amount of money the borrower will receive after closing the loan. This is more common for refinances than for purchases.
Income Tax Rate
Your marginal income tax rate is the rate at which any additional dollars of your income would be taxed at.
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.
Investment Earnings
Your investment earnings are the average annual percentage rate you expect to earn on your investments.
Loan Amount
The initial principal balance or your mortgage at closing.
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.
Refinance Fees
All closing costs for the new mortgage, including any discount points, loan origination fees, appraisal fees, title insurance, etc...
Refinance Savings/(Loss)
The refinance savings/(loss) estimates how a refinance will impact your financially.
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.