What is a Convertible Mortgage?

# What Is A Convertible Mortgage?

A convertible mortgage is a loan that allows borrowers to switch from an adjustable interest rate to a fixed interest rate without refinancing. This type of mortgage gives homeowners flexibility to convert their loan terms when market conditions are favorable. The convertible mortgage option typically requires payment of a conversion fee and must be exercised within a specific timeframe stated in the loan agreement.

Benefits include:

• Protection against rising interest rates
• Avoids refinancing costs
• Maintains original loan maturity date
• No new credit checks or appraisals required

The average price ranges between $500 and $1000 for the conversion fee.