---
title: Balloon Payment
description: A large payment due at the end of a loan’s life. The balloon payment is the final repayment of the loan’s remaining balance.
---

[Realized 1031 Glossary of Terms ](https://www.realized1031.com/glossary)

# [Balloon Payment](https://www.realized1031.com/glossary/balloon-payment)

 Written by [The Realized Team](https://www.realized1031.com/glossary/author/the-realized-team) | Jun 29, 2022 12:00:00 PM

A balloon payment is a large payment due at the end of a loan’s life. This type of payment usually occurs over the life of a short-term loan, which has only been amortized partially over the course of the loan’s term. The balloon payment is the final repayment of the loan’s remaining balance.

For example, if a buyer takes out a five-year balloon loan for $500,000, he has five years of equal loan payments at a lower rate than what it would take to secure the same loan under a traditional mortgage. At the end of the five-year term, the buyer must either repay or refinance the balloon payment that still exists.

[View full post](https://www.realized1031.com/glossary/balloon-payment)

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