A Progressive Premium Mortgage is a unique loan structure designed to accommodate borrowers whose income is expected to rise over time. One of its main features is that the repayment premiums—typically interest or instalment amounts- increase gradually throughout the loan term. Initially, monthly payments are lower, making it easier for borrowers to afford the mortgage early on, especially if they are beginning their careers or expect future income growth.

Another key feature is the tiered or stepped payment structure. Instead of a flat rate, payments are scheduled to rise periodically, such as annually or every few years. This can help manage early financial stress while aligning repayments with projected financial improvements. The interest rate may remain fixed or be variable, depending on the specific loan agreement.

This type of mortgage often includes a longer loan tenure to ease the initial financial burden and to accommodate rising payments without making them unaffordable. Lenders may require detailed income projections or employment guarantees to justify the borrower’s ability to handle future increases.

While this mortgage offers flexibility and lower initial payments, it carries the risk of becoming burdensome if the borrower’s income does not rise as anticipated. Careful financial planning is essential before committing to such an arrangement.