What feature distinguishes a straight loan from other mortgage types?

The characteristic that distinguishes a straight loan from other mortgage types is that during the term of the loan, payments are made only on the interest. This type of loan structure means that the borrower does not begin to pay down the principal balance until the end of the loan term, at which point the entire principal amount is often due as a lump sum. This feature can be appealing for borrowers who want to minimize their monthly out-of-pocket costs during the life of the loan, as they are only responsible for paying the interest.

In comparison, other mortgage types typically require repayment of both principal and interest throughout the loan term, which is not the case with a straight loan. Some mortgages may also impose penalties for early repayment, while the straight loan allows for repayment of principal at the end of the term without such constraints. However, the defining feature remains the focus on interest-only payments until maturity, making it a unique option in the lending landscape.