What type of loan has a five-year term but payments based on a twenty-year repayment schedule?

What would Mr. Cruz’s options be after the five-year term has ended?

The loan described in this case is a bullet loan, and Mr. Cruz would have two options at the end of the five years. He could pay the remaining principal or refinance 100% of the outstanding loan balance.

If Mr. Cruz chooses to pay the balance of the principal, still owed, this is called a balloon payment.