A straight term mortgage consists of payments that include?

A straight term mortgage involves payments that consist solely of interest during the loan term. This type of mortgage is structured so that the borrower makes regular interest payments for a specified period while the principal amount remains unchanged. At the end of the term, the entire principal is due in a lump sum payment, which makes it distinct from other types of mortgages that amortize the principal over the term, resulting in both principal and interest payments combined.

In contrast, a mortgage that includes fully amortized payments calculates both principal and interest to ensure that the loan is entirely paid off by the end of the term. Balloon payments refer to a large final payment due at the end of a loan, which is not characteristic of a straight term mortgage. Principal-only payments typically reduce the owed balance directly without any interest included in the monthly payment, which does not align with the definition of a straight term mortgage. Thus, the correct answer accurately reflects the nature of a straight term mortgage's payment structure.