Maturity Date
The maturity date is the final payment due date for a loan or mortgage when the entire remaining balance becomes due and payable. On this date, the borrower must pay off the loan in full or refinance to avoid default.
Example
“The balloon mortgage has a maturity date of December 31, 2028, when the remaining $200,000 principal balance becomes due in full.”
Memory Tip
At MATURITY DATE, your loan has grown up and it's time to pay the full amount - like a teenager moving out, no more monthly allowances.
Why It Matters
Knowing your loan's maturity date is crucial for financial planning, especially with balloon loans or interest-only mortgages where large payments come due. Missing the maturity date can result in foreclosure or forced sale of the property.
Common Misconception
Most traditional 30-year mortgages don't have early maturity dates—the term refers to shorter-term or balloon loans where full payment is required before the loan is fully amortized.
In Practice
An investor took out a 5-year balloon mortgage with monthly payments based on a 30-year amortization schedule. When the maturity date arrives, they must pay the remaining $180,000 balance in full, requiring them to refinance or sell the property.
Etymology
From Latin 'maturus' (ripe, fully developed), the date represents when a loan has 'ripened' to its full term and must be completely paid, like fruit ready for harvest.
Common Misspellings
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