Table Monthly Payments Year Loan Year Fixed Rate vs GPM


Typical Level Payment ($) Graduated Payment ($)


769 769 769 769 769 769

580 623 670 721 775 883

FHA, VA, and conventional loan programs offer GPMs with a variety of payment schedules. Like an ARM, the GPM will usually help you buy more property. But unlike an ARM, you will know your future payments. An ARMs monthly payments will adjust up or down according to swings in the market interest rates (subject to any floors or caps). Your GPMs monthly payment will steadily go up, unaffected by changes in the market interest rate, until it hits its scheduled plateau. Also, during those early years of lower payments, your mortgage balance may actually go up. Before you accept this type of loan, just as with an ARM, closely review your payment and amortization schedules.

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