Loan TypesHomebuying Glossary
Balloon Mortgage
A loan with small payments for a set period, followed by one large lump-sum payment at the end.
In plain English
A balloon mortgage has lower payments (sometimes interest-only) for an initial period, then requires the remaining full balance to be paid off in one lump sum — often requiring the borrower to refinance or sell before the balloon date.
Why it matters
These are uncommon for typical first-time buyers and carry real risk if you can't refinance or sell before the balloon payment comes due.
Where you'll run into it
Guides and tools on TheBuyingPath that cover balloon mortgage in context.
Related terms
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