Definition of Negative amortization:
Extraordinary circumstances in which the capital increases with the payment of monthly installments. This is usually the case with Progressive Payment Mortgages (PMMs), designed for young executives or professionals (with low initial income, but high potential for rapid growth). In MDM, the amount of the initial payment is Rs. Not enough Therefore, unpaid interest is added to the principal each month. Also known as a partial repayment loan.
Meaning of Negative amortization & Negative amortization Definition