In a graduated payment mortgage, what is the maximum percentage increase allowed for repayments over a 10-year period?

In a graduated payment mortgage, the structure is designed to accommodate borrowers whose income is expected to increase over time. This means that initial payments are lower and gradually increase at predetermined intervals. Over a 10-year period, the typical maximum percentage increase allowed for repayments in most graduated payment mortgage programs can be up to 3% per year. This allows borrowers to adjust their payments in line with their anticipated income growth, making homeownership more accessible.

This 3% increase is a critical component of graduated payment mortgages, as it balances the need for manageable early payments with the requirement for lenders to have assurance that repayment amounts will eventually rise to meet contractual obligations. The option indicating a 3% maximum aligns with standard lending practices in this mortgage type, reflecting an industry-recognized limit for increases while providing borrowers with a structured payment plan.