Direct reduction mortgage (DRM)

Direct reduction mortgage (DRM),

Definition of Direct reduction mortgage (DRM):

  1. Mortgage loan in which at least a portion of each installment payment goes toward reducing the principal borrowed. In a DRM, interest is computed every month on the reducing principal balance resulting in a progressively smaller interest amount. Since the amount of monthly payment is fixed, the portion applied to the principal increases as the interest amount decreases.

Meaning of Direct reduction mortgage (DRM) & Direct reduction mortgage (DRM) Definition