Growing equity mortgages

Growing equity mortgages are the mortgages in which annual increases in monthly payments are used to reduce outstanding principal and to shorten the term of the loan. 

It is a fixed rate mortgage on which the monthly payments increase over time according to a set schedule. The interest rate on the loan does not change, and there is never any negative amortization. In other words, the first payment is a fully amortizing payment. As the payments increase, the additional amount above and beyond what would be a fully amortizing payment is applied directly to the remaining balance of the mortgage, shortening the life of the mortgage and increasing interest savings.