Balloon Mortgage

A mortgage that typically offers low rates for an initial period of time (usually 5, 7, or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower.

Source: U.S. Department of Housing and Urban Development

Mortgage with a final lump sum payment that is greater than preceding payments and pays the loan in full.

Source: Ginnie Mae

Last reviewed October 2021