What are balloon mortgage home loans? Many people mistake them for hybrid loans. Much like a hybrid loan, a balloon mortgage loan carries an initial fixed interest rate for a relatively small number of years. The total years can be from five to six to eight to 10 years. Unfortunately, this is where the comparison ends.A balloon mortgage home loan is a very risky way to go about obtaining a mortgage for a property purchase. The wrist is not so much lie in the terms of the loan, but in the repayment element. With a traditional hybrid loan, you are required to make the initial payments during the fixed interest rate time. With the balloon loan, however, the end of the initial fixed interest rate can be a time of disaster. Why? It all has to do with what happens at the end of that time period.Once your initial fixed term rate runs with balloon home mortgage loans, you are required to pay off full amount due at that time. For instance, assume you borrow $300,000 on a property with a balloon loan. During the first five years of the loan, you reap a $25,000 in principal. At the end of this five year period, if the balloon loan comes due you must come up with $275,000 to pay off the loan. Obviously, you are making a big assumption you will be able to get that kind of money together.