A mortgage requiring lower payments in early years than in later years. Payments increase in steps until the installments are sufficient to amortize the loan. Allows for negative amortization in the early years.
A fixed-interest loan with lower payments in the early years than in the later years. The amount of the payment gradually increases over a period of time and then levels off at a payment sufficient to pay off the loan over the remaining amortization period.
- Browse Related Terms: Alternative mortgage instrument (AMI), Buydown Account, closed-end mortgage, Fixed payment mortgage, fixed-rate mortgage, graduated payment mortgage (GPM), Graduated Payment Mortgages, Growing-Equity Mortgage (GEM), Low-Down-Payment Feature, Property Appreciation, Variable payment plan