Balloon Payment
Lending & MortgagesA large, lump-sum payment due at the end of a loan term after a series of smaller periodic payments.
Example
Example: Suppose you take out a $300,000 30-year fixed mortgage at 6.5%. Understanding balloon payment helps you see how your monthly payment of approximately $1,896 is structured — and how this concept affects your total cost over the life of the loan. Use our mortgage calculator to see how balloon payment impacts your specific situation.