A type of mortgage where the monthly payments start low but increases by a fixed amount each year for the first five years. The payment shortfall or negative amortization is added to the principal balance due on the loan. The advantages if this type of loan is a lower monthly payment at the beginning of the loan term. This disadvantages are typically a slightly higher rate than traditional fixed rate mortgage loan and lenders usually require a larger down payment. In addition, the negative amortized amount increases the balance due on the total loan which can be a problem if the value of the home declines.

A repayment condition in which payments gradually increase at a predetermined rate, usually through the use of negative amortization. The advantage of this type of loan is a lower monthly payment at the beginning of the loan term. The disadvantages are typically a slightly higher rate than a traditional fixed rate mortgage and lenders usually require a larger down payment. In addition, the negative amortization increases the balance due on the total loan which can be a problem if the value of the property declines.

A fixed-rate mortgage with monthly payments increasing gradually over the life of the loan, allowing the borrower to "grow into" the mortgage as his income increases.