What Does it Mean When Your Home Loan Has Matured?

Mature loans are due for payment.

A mature loan is currently due for payment in full. The word "mature" literally means to grow into full form. With a home loan, the maturation date is the day the loan expires and the borrower repays the debt.

Significance

The terms of a mortgage include down payment, monthly payment, interest rate and maturation date. Longer home loans typically involve lower monthly payments, but the interest rate on a long loan may be higher. When you take your mortgage loan, you will consider when the mortgage is set to mature, and the lender will set the terms of your loan based on that date.

Examples

For example, home loans are often extended based on 15 or 30-year terms. A 15-year loan is not common because it would require the borrower to repay the entire debt, often hundreds of thousands of dollars, on a relatively short time table. A 30-year loan is considered the industry standard.

Exceptions

You may move out of the home prior to the time the loan matures. In this case, the balance is paid when the home is sold, prior to the maturation date. Another exception may arise if you choose to refinance your loan. You can push back or move up the maturation date of some home loans in order to adjust your monthly payment. Refinancing can result in penalties, so it should only be pursued if you cannot or do not wish to pay the loan when it matures.

References

• Mature- Definition from Merriam-Webster
• FindLaw: 10 Things to Know about your Bank Loan