There are a few differences between a jumbo mortgage and a balloon mortgage such as length of term, interest rates and payment terms. A jumbo mortgage is a type of home loan used to finance properties that are significantly more expensive than the average home. Jumbo mortgages are generally reserved for
affluent buyers who purchase a home worth more than $548,250. On average, interest rates and down payments are higher, and jumbo mortgages are generally paid off in equal monthly payments. They can have 15- to 30-year terms. Balloon mortgages typically carry lower interest rates and monthly payments than jumbo loans. Unlike a jumbo mortgage, balloon mortgages require borrowers to pay off the
remainder of their loan as a lump sum payment at a predefined time, typically toward the end of the term. A balloon mortgage can last from three to 30 years.