A Balloon Mortgage has a fixed-interest rate and payment, but the term of the payments is only five to seven years. After this time, the entire balance of the loan becomes due.
Balloon Mortgages are typically used as a last resort by people who can not qualify for a fixed or adjustable-rate mortgage. They also are used if you have the assets to pay for a home outright, but want to avoid liquidating them.
5-Year Balloon: A loan with a fixed interest rate and monthly payment for five years. After that, the balance of the loan becomes due in one "balloon" payment.
7-Year Balloon: A loan with a fixed interest rate and monthly payment for seven years. After that, the balance of the loan becomes due in one "balloon" payment.
Royal LePage Mission
3595 114 Ave SE #110
Calgary AB T2Z 3X2