Question:

How to use mortgage calculator with balloon payment?

Answer:

A mortgage calculator with balloon payment is used to estimate your principal and interest payments on a balloon mortgage.

What is a balloon mortgage and how to calculate payments?

A balloon mortgage is one that has principal and interest payments scheduled over a longer period of time and the loan is actually expected to be repaid with a lump sum before the regular amortizing term. A 10/30 balloon means that the mortgage payments are calculated over 30-year term but the balloon is due in 10 years time.

To calculate your balloon payment using a mortgage calculator you will need to know at least your loan-to-value (LTV) ratio, the house price, interest rate and how the balloon home loan will be structured (5/25, 10/30, 7/23, etc.).

For example, you could take a balloon mortgage for a $240,000 home with 20% down payment over 30 years at 6.125%. The balloon payment will be due in 10 years.

Your loan amount is $192,000 and you are not paying PMI. Your monthly mortgage payment (principal and interest) will be $1,166.61 and a balloon payment of $162,376.70 will be required at the end of the 10-year balloon period.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA: