Normally, a mortgage is amortized over 15, 25 or 30 years. It means the amount you borrowed together with all the interest is spread over those years into equal monthly payments. A balloon mortgage is a little different. See the following example:
Let suppose you have a $100,000 mortgage at 7% interest amortize rate of 30 years, 10 year balloon. What it means is that your monthly payment will be the same as a 30 year mortgage. Each month your payment will include so much for interest and so much in principal. By the end of the 10th year, just like your regular 30 year mortgage, you still have a large loan balance. However, unlike the regular 30 year mortgage, your entire unpaid balance of the loan is due.
This kind of mortgage is most often used in commercial properties. Commercial properties turns over between 5 to 10 years. So the owners sleldom need a 20 or 30 year loans. However, 25 to 30 year amortization rate mortgages have lower payments which help provide more cash flow to the owner. Therefore, the 30 year amortization loan with a 10 year balloon is desirable. That is not the case with residential mortgages.