A mortgage loan that does not fully amortize over the term of the loan and requires a large principal payment at the end of the loan term. For example, a ten-year loan that amortizes as if paid over 30 years requires a large principal payment after ten years. The final lump sum due when a balloon mortgage terminates is called a balloon payment. This is in contrast to self-amortizing mortgages, where periodic payments of principal and interest are made in amounts so that the principal balance of the loan is paid down to zero by the maturity date. Balloon mortgages are typical in commercial loans, while self-amortizing mortgages are common in residential loans.