Graduated Payment Mortgage

A graduated payment mortgage starts below the level payment and rises by a fixed percentage each year, matching expected income growth for early-career buyers. The calculation follows PMT₁ = P × (r − g) ÷ (1 − ((1 + g) ÷ (1 + r))^n). On 300,000 at 6.5% over 30 years with 5% annual steps, year one pays ≈3,462 monthly, rising to ≈3,635, ≈3,816, ≈4,007 and ≈4,207 in the following years — versus a fixed 1,896 only if it were interest-only; a level loan here costs 1,896... a level amortizing loan costs 1,896. The result updates instantly whenever you change an input, and every figure is shown in the same currency or units you entered, with no hidden conversion applied.

1. 1

   Step 1

   Enter the required figures for the Graduated Mortgage Calculator in the fields above.

2. 2

   Step 2

   The tool applies PMT₁ = P × (r − g) ÷ (1 − ((1 + g) ÷ (1 + r))^n) to your numbers automatically.

3. 3

   Step 3

   Read the result, shown in the same units you entered.

4. 4

   Step 4

   Adjust the inputs to compare scenarios side by side.

• Ignoring negative amortization

• Underestimating the step

• Forgetting the reset comparison