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Mortgage Amortization Formula with Balloon Payment

A = \frac{iP(1+i)^n}{(1+i)^n - 1} - \frac{iB}{(1+i)^{n+1} - (1+i)}

where:

  • A = periodic payment amount
  • P = amount of principle or loan owing (subtracting any down-payments)
  • i = period interest rate
  • n = total number of payments
  • B = Final Balloon Payment
  • If B = 0, then the amortization formula is the same as the basic one

You can watch the proof of this formula here:

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