When your balloon payment mortgage term ends, you still have to pay for the $20,000 principal amount. There are a couple of accepted institutional loan products that have balloon payment mortgages. One of these balloon payment mortgage products is the 30-year loan that has to be paid off in five or seven years. Often, loans with unattractive mortgage interest rates are sold to FannieMae or FreddieMac which in turn, sell these loans to the secondary market. Mortgage investors purchase these secondary market loans with mortgage interest rates that are undesirable to the regular homebuyer. These investors are actually the ones who set the standards in mortgage interest rates. One point on your second mortgage loan is equivalent to one percent of the amount you borrow. So, if you were to get a second mortgage loan of $10,000 with an eight-point fee, then you would have to pay $800 in "points." Second mortgage loan companies may charge you in varying number of points so if it might be helpful if you do a comparison first. This means you can save a lot with take over mortgages, especially if the interest rate on the existing loan is lower than the current rate on new loans. However, lenders can change the loan terms of take over mortgages so you must be prepared for that. Along with the interest rate and the monthly payments, you also inherit the liability of the take over mortgage. After this initial rate, payments for your variable rate mortgage will be based on CanEquity's Prime rate of less than 0.40%. Variable Rate Mortgage by National Mortgage National Mortgage has three variable rate mortgage programs on its product lists. All three variable rate mortgages have initial payment rates based on current Prime rate of 4.00%. Below are some questions you need to consider: - Is there a possibility that my income will rise up enough to cover higher adjustable-rate mortgage payments should interest rates go up? - Is there a chance that I might take on other sizable debts like a loan for a car or school tuition in the near future?