Growing Equity Mortgage

The growing equity mortgage (GEM) combines the low initial payment of a 30 year mortgage loan with the lower interest rate obtainable for a much shorter term mortgage. Example, in the GEM, the borrower agrees to raise his monthly payment by some fixed percentage each year over the life of the loan. The exact money generated by each payment after the initial year is applied entirely to principal. Thus, a growing equity mortgage calling for an annual increase in monthly payments of 3% would be completely paid out in approximately 15 years. It is a fixed-interest rate, adjustable-payment loan and is sometimes described as a fixed-rate-adjustable-mortgage.

GEM To Equity Mortgage