What's A Balloon Mortgage?

In real estate terms a Balloon Mortgage is a mortgage loan that requires the remaining principal balance be paid at a specific point in time. As an example, a loan may be amortized as if it would be paid over a thirty year period, but requires that at the end of the tenth year the entire remaining balance must be paid.

A balloon payment is the final lump sum payment that is due at the termination of a balloon mortgage.