- 1). Divide the annual interest rate on the mortgage by 12 to find the monthly interest rate. For example, if your monthly mortgage rate equals 6.012 percent, divide 0.06012 by 12 to get 0.00501.
- 2). Add 1 to the result. In this example, add 1 to 0.00501 to get 1.00501.
- 3). Raise the result to the number of payments that you will have made at the time of the balloon payment. For example, if your balloon payment is due after 5 years, or 60 monthly payments, raise 1.00501 to the 60th power to get 1.349655673.
- 4). Multiply the Step 3 result by the amount borrowed. In this example, if you borrowed $160,000, multiply $160,000 by 1.349655673 to get $215,944.9076.
- 5). Subtract 1 from the Step 3 result. In this example, subtract 1 from 1.349655673 to get 0.349655673.
- 6). Multiply the Step 5 result by the amount of each monthly payment. In this example, if the amount of the monthly payment equals $960.52, multiply $960.52 by 0.349655673 to get $335.8512667.
- 7). Divide the Step 6 result by the monthly interest rate. In this example, divide $335.8512667 by 0.00501 to get $67,036.18098.
- 8). Subtract the Step 4 result from the Step 7 result to calculate the amount of the balloon payment. In this example, subtract $67,036.18098 from $215,944.9076 to find the amount of the balloon payment will be $148,908.73.
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