Meaning & use
balloon mortgage
Last updated
Meaning
nouncountablefinance
A home loan with small regular payments for a set period, followed by one large final payment of the remaining balance.
Grammar: Countable: a balloon mortgage, two balloon mortgages.
Patterns
- take out a balloon mortgage
- refinance a balloon mortgage
They chose a balloon mortgage because the monthly payments were low at first.
With a balloon mortgage, you must pay or refinance the large final amount.
A balloon mortgage can be risky if house prices fall.
Word forms
| plural | balloon mortgages |
|---|
Common combinations
- take out a balloon mortgage
- They took out a balloon mortgage to buy the flat.
- balloon mortgage payment
- The balloon mortgage payment is due in seven years.
- refinance a balloon mortgage
- She plans to refinance her balloon mortgage before it ends.
- risks of a balloon mortgage
- The risks of a balloon mortgage include a huge final bill.
- low monthly payments
- A balloon mortgage offers low monthly payments at first.
Synonyms and how they differ
- fixed-rate mortgage
- Has a steady rate and no large final payment, so it is more predictable.
- interest-only loan
- Needs payments of interest only, but the full amount is still owed later.
- bullet loan
- Is a general financial term for a loan repaid in one lump sum at the end.
Opposites
Word family
Commonly confused: balloon mortgage or balloon payment?
balloon mortgage vs balloon payment
Is the final lump sum, while the balloon mortgage is the whole loan.
Practice
What is the main feature of a balloon mortgage?
Choose one answer.
A balloon mortgage ends with one big payment of what is left; the other options describe a normal mortgage, a free loan or the opposite pattern.
Make it your own
Write a sentence using “balloon mortgage”, then check it and compare it with the examples above.