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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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Balloon Payment


Synonyms:huge, large
Filed Under: financial-banking, mortgages
Tags: banking, mortgage
 

Definition of balloon payment

balloon payment
1. A payment or instalment that is made at the end of a specified loan term to pay off the remaining principal. This payment is larger than the regular payments that are made throughout the term of the loan.

Related Terms and Acronyms:

  • balloon loan   A loan in which the payments aren't set up to repay the loan in full by the end of the term. At the end comes the balloon payment -- one that is larger than the other, periodic payments and pays off the remaining principal.
  • balloon mortgage   A loan that has regular monthly payments which amortize over a stated term but call for a final lump sum (balloon payment) at the end of a specified term, or maturity date, such as 10 years.
  • fixed instalment   Periodic (usually monthly) payment on a loan whose sum does not vary.
  • instalment   The regular periodic payment that a borrower agrees to make the lender.
  • mortgage payment   A periodic payment used to pay off a mortgage's principal and interest.
  • step-rate mortgage   A fixed-rate home loan on which payments are lower at the beginning, typically for two years, and which then rise.

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