Balloon Payment Calculator
Work out the monthly instalment and the large final balloon payment for an amortising loan with a balloon term.
Input Data
Results
At a glance:A balloon loan amortises on a long schedule but is cleared early by a balloon. Monthly payment = amortised instalment over the full term; balloon = remaining principal at the balloon year (via the amortisation balance). Example: HK$1,000,000 at 5%, 30-year schedule, balloon at year 5 gives monthly ~HK$5,368 and balloon ~HK$912,900. WARNING: Plan to refinance or save for the balloon; failure to pay may mean default or loss of collateral. Hong Kong retail mortgages are mostly fully amortising, so read for any end-of-term lump sum.
Formula
Monthly rate i = annual rate / 100 / 12; n = amortisation years x 12; n_b = balloon years x 12.
Monthly payment M = A x i x (1+i)^n / ((1+i)^n - 1), A = loan amount.
Balloon = A(1+i)^(n_b) - M/i x ((1+i)^(n_b) - 1) (remaining principal at balloon year).
Total repayment = M x n_b + balloon; total interest = total repayment - A.
$$i = \dfrac{\text{annualRate}}{100 \times 12}, \quad n = \text{amortizationYears} \times 12, \quad n_b = \text{balloonYears} \times 12$$$$M = A \times \dfrac{i\,(1+i)^n}{(1+i)^n - 1}$$$$\text{Balloon} = A\,(1+i)^{n_b} - \dfrac{M}{i}\left[(1+i)^{n_b} - 1\right]$$How to Use
- Enter the loan amount and annual rate.
- Enter the amortisation term and the balloon year.
- View the monthly payment, the balloon, total repayment and interest.
FAQ
What is a balloon payment?
A large final lump-sum payment due at the end of a loan, while regular payments are based on a longer amortisation. It keeps monthly payments low but leaves a big balance to clear at the end.
Are balloon loans common in Hong Kong?
Hong Kong residential mortgages are mostly fully amortising, so pure balloon structures are rarer in retail mortgages. But they appear in commercial property loans, developer bridge finance, and some car or private loans with a 'balloon final payment'. Always check the contract for any end-of-term lump sum.
What if I cannot pay the balloon at maturity?
Commonly you 'refinance' — arrange a new loan before the balloon to clear it, effectively extending the loan. But refinancing success and rate depend on your credit, the property value and market rates at that time. If it fails and you lack cash, you may default or lose the collateral. Plan a backup before borrowing.
How is it different from interest-only?
Interest-only loans pay just interest each month and repay principal at the end in one go — effectively a 100% balloon. A balloon loan pays some principal monthly (lower payment than full amortisation) and a smaller-but-still-large balance at the end. Both leave an end lump sum; the difference is how much principal is chipped away monthly.
How do I compare the true cost?
Look beyond the low monthly payment: include the balloon, total interest to the balloon, and the refinancing risk. Compare the all-in cost and the APR, and stress-test whether you could cover the balloon from savings or a new loan. Do not pick a balloon just for a low monthly figure.
Related Tools
References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.