A loan amortized over 30 years but due and payable in five years is known as what?

A loan that is amortized over 30 years but is due and payable in five years is referred to as a partially amortized balloon loan. In this type of loan structure, borrowers make regular monthly payments that are calculated based on a longer amortization period, which results in lower monthly payments compared to a loan that is fully amortized over the same shorter term. However, since the loan is actually due after five years, the remaining balance (the "balloon" payment) must be paid in full at that time.

This structure is beneficial in certain situations, often allowing for lower initial payments, but requires the borrower to be prepared for a significant final payment at the end of the term. It contrasts with a fully amortized loan, where the loan would be completely paid off by the end of the term, eliminating this large final payment.

Understanding the differences between these loan types is crucial for borrowers and lenders to manage repayment expectations and financial planning effectively.