Balloon Mortgage Calculator

✖Present Value of Original Balance refers to the current worth of the initial amount of money or investment at a specific point in time.ⓘ Present Value of Original Balance [PV]			+10% -10%
✖Rate of Interest per Annum refers to the annualized interest rate charged on a loan or investment over one year.ⓘ Rate of Interest per Annum [R]			+10% -10%
✖Frequency of Payments refers to how often payments are made within a specific period, such as daily, weekly, monthly, quarterly, semi-annually, or annually.ⓘ Frequency of Payments [n]			+10% -10%
✖Payment refers to the amount paid while financing an investment.ⓘ Payment [PT]			+10% -10%

✖Balloon Mortgage is a type of mortgage loan that requires the borrower to make relatively low monthly payments for a fixed period, followed by a large balloon payment at the end of the loan term.ⓘ Balloon Mortgage [BM]

⎘ Copy

👎

Formula

✖

Balloon Mortgage

Formula

`"BM" = "PV"*(1+"R")^"n"-"PT"*((1+"R")^"n"-1/"R")`

Example

`"20466.31"="505"*(1+"0.56")^"12"-"410"*((1+"0.56")^"12"-1/"0.56")`

Calculator

LaTeX

Reset

👍

Balloon Mortgage Solution

STEP 0: Pre-Calculation Summary

Formula Used

Balloon Mortgage = Present Value of Original Balance*(1+Rate of Interest per Annum)^Frequency of Payments-Payment*((1+Rate of Interest per Annum)^Frequency of Payments-1/Rate of Interest per Annum)
BM = PV*(1+R)^n-PT*((1+R)^n-1/R)
This formula uses 5 Variables

Variables Used

Balloon Mortgage - Balloon Mortgage is a type of mortgage loan that requires the borrower to make relatively low monthly payments for a fixed period, followed by a large balloon payment at the end of the loan term.
Present Value of Original Balance - Present Value of Original Balance refers to the current worth of the initial amount of money or investment at a specific point in time.
Rate of Interest per Annum - Rate of Interest per Annum refers to the annualized interest rate charged on a loan or investment over one year.
Frequency of Payments - Frequency of Payments refers to how often payments are made within a specific period, such as daily, weekly, monthly, quarterly, semi-annually, or annually.
Payment - Payment refers to the amount paid while financing an investment.

STEP 1: Convert Input(s) to Base Unit

Present Value of Original Balance: 505 --> No Conversion Required
Rate of Interest per Annum: 0.56 --> No Conversion Required
Frequency of Payments: 12 --> No Conversion Required
Payment: 410 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

BM = PV*(1+R)^n-PT*((1+R)^n-1/R) --> 505*(1+0.56)^12-410*((1+0.56)^12-1/0.56)

Evaluating ... ...

BM = 20466.3092415285

STEP 3: Convert Result to Output's Unit

20466.3092415285 --> No Conversion Required

FINAL ANSWER

20466.3092415285 ≈ 20466.31 <-- Balloon Mortgage

(Calculation completed in 00.004 seconds)

You are here -

Home » Financial » Investment Banking » Balloon Mortgage

Credits

Created by Aashna

IGNOU (IGNOU), India

Aashna has created this Calculator and 50+ more calculators!

Verified by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

Keerthika Bathula has verified this Calculator and 25+ more calculators!

< 14 Investment Banking Calculators

401(K) Calculator

Go 401(K) Calculator = Starting Account Balance*(1+Rate of Interest per Annum)^(Frequency of Interest*Number of Periods for 401(k) shall be made)+(Fixed Amount Invested at Regular Intervals)*((1+Rate of Interest per Annum)^(Frequency of Interest*Number of Periods for 401(k) shall be made))-((1)/(Rate of Interest per Annum))

Roth IRA

Go Roth Ira = Amount Deposited*(1+Rate of Interest per Annum)^(Frequency of Interest Paid*Number of Periods)+Periodical Fixed Amount Invested*(((1+Rate of Interest per Annum)^(Frequency of Interest Paid*Number of Periods)-1)*(1+Rate of Interest per Annum))/(Rate of Interest per Annum)

Boat Loan

Go Boat Loan = (Amount Borrowed*Rate of Interest per Annum*(1+Rate of Interest per Annum)^(Number of Periods for a Loan Outstanding*Frequency wherein the loan amount will be repaid))/((1+Rate of Interest per Annum)^(Number of Periods for a Loan Outstanding*Frequency wherein the loan amount will be repaid)-1)

Balloon Mortgage

Go Balloon Mortgage = Present Value of Original Balance*(1+Rate of Interest per Annum)^Frequency of Payments-Payment*((1+Rate of Interest per Annum)^Frequency of Payments-1/Rate of Interest per Annum)

Adjustable Rate Mortgage

Go Adjustable Rate Mortgage = ((Loan Amount*Rate of Interest per Annum)*(1+Rate of Interest per Annum)^(Number of Periods))/((1+Rate of Interest per Annum)^(Number of Periods-1))

Auto Lease

Go Auto Lease = ((Capitalised Cost-Residual Value at End of Lease Term)/Term of Lease Period+(Capitalised Cost+Residual Value at End of Lease Term)*Money Factor)

College Savings

Go College Savings = College Amount Required/(((1+Rate of Interest per Annum)^(Number of Periods*Frequency of Interest Paid)-1)/(Rate of Interest per Annum))

Fixed Deposit

Go Fixed Deposit = Principal Amount*(1+Rate of Interest per Annum/Frequency of Interest Paid)^(Number of Periods*Frequency of Interest Paid)

Churn Rate for Customers

Go Churn Rate = (Total Number of Customers Lost During Period/Total Number of Customers at beginning of period)*100

Pension

Go Pension = Average Salary*Factor in Terms of Percentage*Number of Years Worked

Upfront Payment

Go Upfront Payment = Loan Amount*Upfront Percentage*Number of Points

Home Equity Loan

Go Home Equity Loan = Market Value of Property-Outstanding Principal Balance of Loan

Cost of Living

Go Cost of Living = Prices in Current Year/Prices in Base Year

Asset Allocation

Go Asset Allocation = 100-Age of the Individual

Balloon Mortgage Formula

What do you mean by Balloon Mortgage ?

Balloon Mortgage is a large one-time amount due at the end of a loan. This final payment is substantially larger than the regular monthly payments and typically represents the remaining principal balance of the loan. Balloon mortgages can be attractive to borrowers who expect their financial situation to improve significantly before the balloon payment becomes due, such as those expecting a substantial increase in income or planning to sell the property. They may also be suitable for borrowers who plan to refinance or sell the property before the balloon payment is due. However, balloon mortgages also carry risks, particularly if the borrower is unable to make the balloon payment when it becomes due. This could lead to financial difficulties, foreclosure, or the need to sell the property under unfavorable conditions.As with any financial decision, borrowers considering a balloon mortgage should carefully weigh the potential benefits and risks and ensure they have a clear plan for handling the balloon payment.

How to Calculate Balloon Mortgage?

Balloon Mortgage calculator uses Balloon Mortgage = Present Value of Original Balance*(1+Rate of Interest per Annum)^Frequency of Payments-Payment*((1+Rate of Interest per Annum)^Frequency of Payments-1/Rate of Interest per Annum) to calculate the Balloon Mortgage, Balloon Mortgage is a loan with low initial payments but requires the borrower to repay the balance in full in a lump sum. Balloon Mortgage is denoted by BM symbol.

How to calculate Balloon Mortgage using this online calculator? To use this online calculator for Balloon Mortgage, enter Present Value of Original Balance (PV), Rate of Interest per Annum (R), Frequency of Payments (n) & Payment (PT) and hit the calculate button. Here is how the Balloon Mortgage calculation can be explained with given input values -> 20466.31 = 505*(1+0.56)^12-410*((1+0.56)^12-1/0.56).

FAQ

What is Balloon Mortgage?

Balloon Mortgage is a loan with low initial payments but requires the borrower to repay the balance in full in a lump sum and is represented as BM = PV*(1+R)^n-PT*((1+R)^n-1/R) or Balloon Mortgage = Present Value of Original Balance*(1+Rate of Interest per Annum)^Frequency of Payments-Payment*((1+Rate of Interest per Annum)^Frequency of Payments-1/Rate of Interest per Annum). Present Value of Original Balance refers to the current worth of the initial amount of money or investment at a specific point in time, Rate of Interest per Annum refers to the annualized interest rate charged on a loan or investment over one year, Frequency of Payments refers to how often payments are made within a specific period, such as daily, weekly, monthly, quarterly, semi-annually, or annually & Payment refers to the amount paid while financing an investment.

How to calculate Balloon Mortgage?

Balloon Mortgage is a loan with low initial payments but requires the borrower to repay the balance in full in a lump sum is calculated using Balloon Mortgage = Present Value of Original Balance*(1+Rate of Interest per Annum)^Frequency of Payments-Payment*((1+Rate of Interest per Annum)^Frequency of Payments-1/Rate of Interest per Annum). To calculate Balloon Mortgage, you need Present Value of Original Balance (PV), Rate of Interest per Annum (R), Frequency of Payments (n) & Payment (PT). With our tool, you need to enter the respective value for Present Value of Original Balance, Rate of Interest per Annum, Frequency of Payments & Payment and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

Home

FREE PDFs

🔍 Search