Balloon mortgages are short term mortgages.  This type of mortgage has some features of a fixed rate mortgage. The loans provide a level payment feature during the term of the loan, but as opposed to the 30 or 15 year fixed rate mortgage, balloon loans do not fully amortize over the original term. Balloon mortgages can have many types of maturities, but most have a term of 5 to 7 years.

There is a remaining principal loan balance at the end of the loan term .  The mortgage company generally requires that the loan be paid in full at that time.  This can be accomplished by refinancing.