What is a characteristic feature of a balloon mortgage?

A balloon mortgage is characterized by a structure where the borrower makes regular, smaller payments over the term of the loan, followed by a large final payment. This final payment, often significantly larger than the preceding ones, is due at the end of the loan term. This feature distinguishes balloon mortgages from traditional fixed-rate mortgages, which have consistent payments throughout the loan duration. The presence of this large payment can sometimes make it more challenging for borrowers to plan their finances, as they need to ensure they have the means to pay off the outstanding balance when it comes due. Understanding this characteristic is crucial for both borrowers and lenders, as it influences the long-term financial strategy and potential refinancing options.