Robert McLister·General·April 18, 2010Negative Amortization A situation where your mortgage payment is not enough to cover the interest due. The interest then builds up and your principal increases instead of shrinking. Negative amortization can occur when you have a fixed-payment variable-rate mortgage and prime rate rises significantly. Like news like this?Join our CMT Updates list and get the latest news as it happens. Unsubscribe anytime. SUBSCRIBE! Thank you for subscribing. One more step: Please confirm your subscription via the email sent to you.