Definition of balloon mortgage in English:
A mortgage in which a large portion of the borrowed principal is repaid in a single payment at the end of the loan period.
- Unlike many other mortgages, balloon mortgages do not pay themselves off at the end of the loan term.
- The balloon mortgage is a fixed-rate mortgage with a shorter term than traditional mortgages have.
- Many borrowers of balloon mortgages refinance their loan before the balloon payment is due.