"Negative amortization"

A rise in the loan balance when the mortgage payment is less than the interest due. Sometimes called "deferred interest." It is explained in detail in How Does Negative Amortization on a Mortgage Work? Negative amortization arises most frequently on ARMs. See Should You Fear Negative Amortization and Is a 3.95% Adjustable Rate Mortgage a Good Deal?

Mortgage glossary and terms by letter

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