Balloon Mortgages
A balloon mortgage offers low monthly payments for a set term, followed by a lump sum. At Honor, you can refinance or simply renew into a new balloon term at current market rates—no big payoff required.
A More Affordable Way Home
rate as low as
5.22%*
5.40% APR*
for a 5.5 year balloon with 30-year amortization
A More Affordable Way to Home
Rates as low as
5.22%* | 5.40% APR*
for a 5.5 year balloon with 30-year amortization
What is a Balloon Mortgage?
A balloon mortgage is a home loan with lower monthly payments for 5.5, 7, or 10 years, followed by a large final payment. At Honor, you can refinance or simply renew into a new balloon term at current market rates. It’s a smart option if you plan to move, sell, or refinance before the balloon payment is due.
Why Choose a Balloon Mortgage?
- Lower initial monthly payments than traditional fixed-rate loans
- Short-term savings on interest
- Ideal for strategic buyers planning to refinance or sell soon
- Great option for investment properties or starter homes
Best For:
- Buyers who expect to sell or refinance within 5–7 years
- Those who want lower payments up front
- Borrowers with a strong financial strategy and exit plan
- Homebuyers who don't plan to stay long-term
*APR = Annual Percentage Rate. Advertised 5.22% rate is the “as low as” standard interest rate and includes 0.25% rate discount for having at least (1) direct deposit into Honor Credit Union checking account per month. Annual Percentage Rate (APR) on a standard 5.22% interest rate based on 5.5-year balloon loan with a 30-year amortization is 5.40%. The rate shown reflects a $175,000 loan amount, estimated closing costs of $3,553, with a loan to value of 80% or less and a credit score of 780 or above. Payment Example: The monthly payment schedule on a loan amount of $175,000 based on 5.40% APR would be: $963.11. If an escrow account is required or requested, the actual payment will also include amounts for real estate taxes and homeowner’s insurance premiums. Promotional rates are valid on purchase and refinances. Subject to credit approval. Rates, terms and conditions subject to change. Your interest rate and repayment terms will be based on your individual credit history, property values, and other qualifying factors that may be different than rate quoted above. Loans with less than 20% down payment may require private mortgage insurance. Offer excludes jumbo loans, construction and renovation loans, investment properties, vacant land, and other special programs. Other restrictions may apply. Offer cannot be combined with any other discounts or promotions. Limited time offer. Standard qualifications apply. Loans subject to final credit approval. Equal Housing Opportunity. Insured by NCUA.
Get Started With A Balloon Mortgage
How a Balloon Loan Works
Term Length
Monthly Payments
Final Payment
5.5, 7, or 10 years
Low and interest-focused
Honor options include: one large balloon payment at end of term, refinance, or let the loan renew at current market rates.
Term Length
5.5, 7, or 10 years
Monthly Payments
Low and interest-focused
Final Payment
Honor options include: one large balloon payment at end of term, refinance, or let the loan renew at current market rates.
Example: On a 7-year balloon mortgage, you’ll make regular payments for 7 years. At the end, you’ll either pay off the remaining balance in full or renew into a new loan at current market rates.
Balloon Mortgage vs. Fixed-Rate Mortage
Balloon Mortgage
Fixed-Rate Mortgage
Monthly payments:
Lower payments during term
Consistent over life of loan
Final Payment:
One large balloon, or renew
None (fully amortized)
Best for:
Lower payments during term
Consistency over life of loan
Is a Balloon Mortgage Right for You?
Things to Consider:
- Your Honor Balloon Mortgage will automatically renew at current market rates if you don't pay off or refinance before the balloon is due
- May not be ideal if you're uncertain about future income or plans
- Not eligible for all borrowers—credit and income requirements apply
A balloon loan may be a smart fit if:
- You plan to relocate or upgrade homes in a few years
- You’re buying a vacation or investment property
- You want to take advantage of lower payments now and have a plan for the future
Get Expert Guidance
Balloon mortgages can be powerful financial tools—but they’re not for everyone. Our mortgage experts are here to help you decide if this loan type fits your goals and to walk you through all your options.
More To Explore
How to Get Pre-Approved for a Mortgage: What Lenders Really Look For
What Is an Escrow Account? A Complete Guide for Homebuyers and Homeowners
When Is the Right Time to Refinance Your Mortgage
How to Get Started on a Home Build: Your Construction Loan Checklist
Should You Rent or Buy a Home? How to Decide What’s Best for You
Will Applying for a Mortgage Hurt Your Credit?
How to tap into ‘your home’s cash’ and free up your budget
What Are Closing Costs When Buying a Home? Here’s What to Expect
Do I Have to Put 20% Down to Buy a Home?
Summer Home Improvements You Can Tackle with a Home Equity Loan or HELOC
Frequently Asked Balloon Mortgage Questions
You’ll need to refinance, sell your home, or pay the remaining balance in full. Planning ahead is essential.
Often, yes—especially in the initial years. That’s why they’re attractive to buyers who expect short-term ownership.
They can be, but only if you have a clear plan for the future. Our team can help evaluate whether it’s a fit for your situation.
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*APR = Annual Percentage Rate. Your rate may be different depending on your credit profile and home value. Rates are subject to change without notice. Additional restrictions may apply.