Growing-Equity Mortgage

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.

Investopedia Says:
Don't confuse a growing-equity mortgage with a graduated payment mortgage. A graduated payment mortgage also has a fixed interest rate and payments that increase at set intervals, but a graduated payment mortgage has negative amortization. In other words, unlike a growing-equity mortgage, the initial payments on a graduated payment mortgage are set below what a fully amortizing payment would be (they're actually set below what an interest only payment would be). This creates negative amortization, not interest savings.

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Mortgage with a fixed interest rate and growing payments. This technique allows the homeowner to build equity in the underlying home faster than if they made the same mortgage payment for the life of the loan. Borrowers who take on GEM loans should be confident in their ability to make higher payments over time based on their prospects for rising income.

Mortgage loan in which the payment is increased by a specific amount each year, with the additional payment amount applied to Principal retirement. As a result of the added principal retirement, the maturity of the loan is significantly shorter than for a comparable Level-Payment Mortgage.

A Mortgage loan in which the payment is increased by a specific amount each year, with the additional payment amount applied to Principal retirement. As a result of the added principal retirement, the Maturity of the loan is significantly shorter than a comparable Level-Payment Mortgage.
Example: Long purchased her home with a growing-equity mortgage. Long's monthly payments will increase by 5% each year, with the increased amount applied to principal. Long will Retire the loan in about half the time required to retire a comparable loan with fixed payments.