The defining feature of a balloon mortgage is its payment structure. With most balloon mortgages, you make small monthly payments over the mortgage’s term. And at the end of the term, you pay off the entire mortgage.
The final payment at the end of the loan’s term is the balloon payment. It accounts for the total outstanding balance of the mortgage. If you make low monthly payments over the loan’s lifespan, your balloon payment will likely be quite large – typically 80% of the mortgage or more.