A growing-equity mortgage (GEM) is a type of fixed-rate mortgage where monthly payments increase over time according to a set schedule, rather than remaining fixed and equal over the loan term. The interest rate on the loan does not change, and there is never any negative amortization. Instead, the first payment is a fully-amortizing payment and as the payment amount increases over time, the additional amount beyond what would be a fully amortizing payment is applied directly to the remaining mortgage principal, shortening the life of the loan and increasing overall interest savings.