An acceleration clause in a mortgage means that upon the happening of a specified event, the entire loan balance becomes due.

• A. The entire loan balance becomes due upon a specified event
• B. The borrower gains the right to prepay without penalty
• C. The property is exempt from taxes in event of default
• D. The lender can extend the term without consent

Answer: (A)

An acceleration clause is a provision that lets the lender demand immediate repayment of the entire loan balance if a specified event occurs, usually a default or breach of loan terms. This protects the lender by not waiting for the original schedule to run its course when the borrower has violated the agreement. So, the statement that upon a specified event the entire loan balance becomes due is exactly what acceleration means. It isn’t about prepaying without penalty, tax exemptions, or extending the term without consent, which are unrelated concepts in this context.