The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

NEGATIVE AMORTIZATION Definition & Legal Meaning

Definition & Citations:

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.


This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.