Balloon Loan Calculator
Model the standard CRE loan structure: payments set by a long amortization, balance due at a short balloon. Payment, balloon amount, and interest — instantly.
Monthly payment
Balloon balance due
Total paid to balloon
Interest / principal split
Worked example
"$1,000,000, 7%, 25 due in 10": the 25-year amortization sets the payment at $7,068 a month. Over ten years you'll pay $848,135 — yet $634,477 of it is interest, so only $213,658 of principal retires and $786,342 balloons due at maturity. That asymmetry isn't a trick; it's how amortization schedules front-load interest. Buyers who see the balloon number on day one negotiate rate, term, and exit strategy differently — which is the point of running it now.
Matching debt to lease
The quiet discipline: keep the balloon date well inside your lease's healthy years. Refinancing a 6.9% cap property is routine with 10 years of term left and expensive with 3. Check your deal's dates against the lease expiry calculator before you sign the term sheet, not after.
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Methodology & FAQs
What is a balloon loan and why does commercial real estate use them?
A loan whose payments amortize as if it ran 20–25 years, but whose full remaining balance comes due much sooner — commonly year 5, 7, or 10. Lenders like the shorter commitment in a moving rate environment; borrowers get lower payments than a fully-amortizing short loan would demand. Most NNN financing is structured this way, which makes the balloon date the most important date in your deal after lease expiry.
How is the balloon payment calculated?
The calculator amortizes normally — monthly payment from principal, rate, and amortization period — then computes the principal still outstanding when the balloon term ends: balance = P(1+r)^k − pmt×((1+r)^k − 1)/r, with r the monthly rate and k the payments made. On a $1M loan at 7% with 25-year amortization, ten years of $7,068 payments still leave $786,342 due — amortization front-loads interest, and the balloon number surprises everyone once.
What are my options when the balloon comes due?
Refinance (the default plan — at whatever rates and lease-term realities exist then), sell before maturity, or pay it off. The risk case is refinancing a property whose lease has gotten short: a 10-year balloon against a 12-year lease means renegotiating debt with 2 years of term left, which lenders price punitively. Align the balloon inside your lease's comfortable years — it's the cheapest risk management in net lease.
Why do lenders quote "25 due in 10" and what does it mean?
Shorthand for 25-year amortization, balloon due in year 10 — exactly what this tool models. The first number sets your monthly payment (longer = lower), the second sets when you face the market again (longer = safer, usually pricier). Compare quotes by total cost to the balloon date plus the balance you'll owe, not by payment alone; a slightly higher rate with a longer balloon often wins on risk.
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