NEGATIVE AMORTIZATION
\nˈɛɡətˌɪv ɐmˌɔːta͡ɪzˈe͡ɪʃən], \nˈɛɡətˌɪv ɐmˌɔːtaɪzˈeɪʃən], \n_ˈɛ_ɡ_ə_t_ˌɪ_v ɐ_m_ˌɔː_t_aɪ_z_ˈeɪ_ʃ_ə_n]\
Definitions of NEGATIVE AMORTIZATION
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Expected condition with an increasing principal amount increases following each monthly installment payment. Graduated payment mortgages (GPM) designed to match young executives or professionals with low starting income but high, rapid growth potential have this characteristic. The initial months' payments are insufficient to cover the interest. The unpaid interest is added to the principal balance every month. Also known as partially amortizing loan.
By Henry Campbell Black
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Snake's-head
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