I’m trying to understand BALLOON MORTGAGES. Can someone help me understand the following example?
I entered the following into an online mortgage balloon calculator:
Loan amount $ 100,000.00
Interest rate 6.000%
Term 10 years
Amortization period 30 years
My question is:
After 119 monthly payments of $ 599.55 why does the balloon payment come out to $ 84,285.33 ? If everything is due on a 30 year amortization schedule, shouldn’t the amount owed be the remaining 241 payments multiplied by $ 599.55 ($ 144,491.55) ? If not, then where does the $ 84,285.33 come from?