# Balloon Loan Calculator

> Computes the payments of a balloon loan: the monthly payment amortized over the full amortization period, the lump-sum balance (balloon) due when the loan matures early, and the total paid and interest up to and including the balloon.

- Calculator id: `balloon-loan` · Category: Finance (`finance`) · Tool name: `calculate_balloon_loan`
- Canonical page: https://tttkmbb.com/finance/balloon-loan · This document: https://tttkmbb.com/finance/balloon-loan.md · JSON definition: https://tttkmbb.com/finance/balloon-loan.json

## Purpose

Computes the payments of a balloon loan: the monthly payment amortized over the full amortization period, the lump-sum balance (balloon) due when the loan matures early, and the total paid and interest up to and including the balloon.

**Use when:** You need the monthly payment and final lump sum of a mortgage, commercial or auto loan whose payments are based on a long amortization but which must be repaid or refinanced after a shorter term.

**Do not use when:** The loan is fully amortized over its term (use loan-payment or amortization-schedule), or payments are interest-only before the lump sum (use interest-only-loan). Informational; not financial advice.

## Input

| Parameter | Type | Unit | Required | Description |
| --- | --- | --- | --- | --- |
| `loan_amount` | number |  | required | Principal borrowed. (> 0, max 1000000000000) |
| `interest_rate_percent` | number | % | required | Fixed nominal annual rate in percent; the monthly rate is this / 12. (min 0, max 100) |
| `amortization_years` | number | years | optional, default 30 | Period over which the monthly payment is calculated as if the loan were fully amortizing (e.g. 30). (> 0, max 100) |
| `balloon_after_years` | number | years | required | Years until the remaining balance is due as a lump sum; must be shorter than amortization_years. (> 0, max 100) |

## Output

| Field | Type | Unit | Description |
| --- | --- | --- | --- |
| `monthly_payment` | number |  | Level payment that would amortize the loan over amortization_years. |
| `payments_before_balloon` | integer |  | Number of monthly payments made before the balloon, 12 × balloon_after_years. |
| `balloon_payment` | number |  | Remaining balance due with the last scheduled payment (closed-form remaining balance). |
| `principal_paid_before_balloon` | number |  | loan_amount − balloon_payment. |
| `total_paid_before_balloon` | number |  | monthly_payment × payments_before_balloon (excluding the balloon). |
| `total_interest` | number |  | total_paid_before_balloon + balloon_payment − loan_amount. |
| `total_cost` | number |  | total_paid_before_balloon + balloon_payment: everything paid over the life of the loan. |
| `balloon_share_of_loan_percent` | number | % | balloon_payment / loan_amount × 100. |

## Formula

`i = interest_rate_percent / 1200; N = 12 × amortization_years; n = 12 × balloon_after_years; monthly_payment M = P × i / (1 − (1 + i)^−N); balloon_payment = P(1 + i)^n − M((1 + i)^n − 1)/i; total_paid_before_balloon = M × n; total_interest = M × n + balloon − P; total_cost = M × n + balloon`

Standard monthly amortization with end-of-month payments; the balloon equals the amortized balance after n payments and is assumed paid with the n-th payment. With a zero rate the payment is P / N and the balloon P − M × n. Lenders round payments to cents, so real balances can differ by a few cents.

## Data Sources

- CFPB – What is a balloon payment? When is one allowed? — https://www.consumerfinance.gov/ask-cfpb/what-is-a-balloon-payment-when-is-one-allowed-en-104/ (government, retrieved 2026-09-24)
- Wikipedia – Balloon payment mortgage — https://en.wikipedia.org/wiki/Balloon_payment_mortgage (reference, retrieved 2026-09-24)
- Wikipedia – Amortization calculator (annuity payment formula) — https://en.wikipedia.org/wiki/Amortization_calculator (reference, retrieved 2026-09-24)

Data freshness: `static`. Deterministic formula with fixed constants; results never go stale. Inputs supplied by the caller determine the output.

## API

- `GET https://tttkmbb.com/api/v1/calculate/balloon-loan?loan_amount=…&interest_rate_percent=…&balloon_after_years=…`
- `POST https://tttkmbb.com/api/v1/calculate/balloon-loan` with JSON body `{"inputs": {…}}`
- Response: unified envelope (`success`, `request`, `result.values`, `result.units`, `sources`, `freshness`, `timestamp`, `next_actions`, `links`); see https://tttkmbb.com/docs/response-format.md
- Schema: https://tttkmbb.com/api/v1/calculators/balloon-loan · OpenAPI operationId `calculate_balloon_loan` in https://tttkmbb.com/openapi.json
- Authentication: none. Rate limit: fair use, see https://tttkmbb.com/docs/rate-limits.md.

## MCP

- Server: `https://tttkmbb.com/mcp` (Streamable HTTP, JSON-RPC 2.0, no auth)
- Tool:  `run_calculator` with `{"calculator_id": "balloon-loan", "inputs": {…}}`

## Example

- 200,000 at 6 %, 30-year amortization, balloon after 7 years: inputs `{"loan_amount":200000,"interest_rate_percent":6,"amortization_years":30,"balloon_after_years":7}` → `{"monthly_payment":1199.1,"payments_before_balloon":84,"balloon_payment":179278.77,"principal_paid_before_balloon":20721.23,"total_paid_before_balloon":100724.49,"total_interest":80003.26,"total_cost":280003.26}`
- 500,000 at 7 %, 25-year amortization, balloon after 5 years: inputs `{"loan_amount":500000,"interest_rate_percent":7,"amortization_years":25,"balloon_after_years":5}` → `{"monthly_payment":3533.9,"payments_before_balloon":60,"balloon_payment":455810.76,"total_paid_before_balloon":212033.76,"total_interest":167844.52,"total_cost":667844.52}`

```
GET https://tttkmbb.com/api/v1/calculate/balloon-loan?loan_amount=200000&interest_rate_percent=6&amortization_years=30&balloon_after_years=7
```

## Limitations

The loan is fully amortized over its term (use loan-payment or amortization-schedule), or payments are interest-only before the lump sum (use interest-only-loan). Informational; not financial advice. Standard monthly amortization with end-of-month payments; the balloon equals the amortized balance after n payments and is assumed paid with the n-th payment. With a zero rate the payment is P / N and the balloon P − M × n. Lenders round payments to cents, so real balances can differ by a few cents. All values are computed from the formula above; no measurement or live data is involved.

## FAQ

**Why is the balloon still so large after 7 years?**

Early payments of a 30-year amortization are mostly interest: on 200,000 at 6 % only 20,721 of the 100,724 paid in the first 84 months is principal, leaving 179,279 due.

**Is the balloon included in total_interest?**

No. The balloon is repayment of principal; total_interest = all monthly payments + balloon − loan_amount, which is the interest actually charged over the 7 years.

**What happens at the balloon date?**

The borrower must pay the balance in cash, refinance it or sell the asset; if refinancing is unavailable the loan defaults, which is why CFPB rules restrict balloon features in qualified mortgages.

## Related

- [Amortization Schedule Calculator](https://tttkmbb.com/finance/amortization-schedule.md) — Full year-by-year balance of the amortization.
- [Loan Payment Calculator](https://tttkmbb.com/finance/loan-payment.md) — Fully amortizing payment over any term.
- [Interest-Only Loan Calculator](https://tttkmbb.com/finance/interest-only-loan.md) — Alternative structure with interest-only payments before amortization.