Because borrowers may not have the resources to make the balloon payment at the end of the loan term, a two-step mortgage plan may be used with balloon payment mortgages.
If the repayment model on a loan is not fully amortized, then the last payment due may be a large balloon payment of all remaining principal and interest.
At this point, just like having a balloon payment in an adjustable rate mortgage, the glacier has to pay a whole new portion of its balance via icebergs.
Other forms of mortgage loans include interest only mortgage, graduated payment mortgage, variable rate mortgage (including adjustable-rate mortgages and tracker mortgages), negative amortization mortgage, and balloon payment mortgage.