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Canadian Financial, Real Estate and Mortgage Glossary
How often this word is used
62% - Often
62% - Often
|Synonyms:||able to be changed, changeable, modifiable, swappable|
Definition of convertible mortgage
- convertible mortgage
- 1. An adjustable-rate home loan which the borrower has the option at specified times of changing into a fixed-rate loan.
Related Terms and Acronyms:
adjustable-rate mortgage (ARM)
A type of mortgage loan program in which the interest rate and payments may be adjusted as frequently as every month. The principal loan balance or term of the loan may also be adjusted to reflect the rate change. The purpose of the program is to allow mortgage interest rates to fluctuate with market conditions.
➥ A type of variable rate mortgage product.
- conversion clause A provision that may appear in an adjustable-rate loan agreement allowing the loan to be changed to a fixed-interest rate loan, usually for an additional charge.
- convertible arm An adjustable rate mortgage (ARM) that can be converted to a fixed-rate mortgage under certain conditions.
- fixed rate mortgage (FRM) A loan in which the interest rate and payments remain the same for the entire life of the loan. The interest rate and payment amounts are set at the time of loan origination.
- lock-in A lender's guarantee that the mortgage rate quoted will not change for a specific period. The borrower wants the lock to stay in effect until closing.
- mortgage (mtg) A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
- mortgage application A document in which a prospective borrower details his or her financial situation to qualify for a loan.
An individual or group who brokers deals between their clients and lenders.
➥ CanEquity is a mortgage brokerage.
- mortgage renewal A renewal as it pertains to the mortgage industry is defined as having an existing mortgage term end and signing a new term to continue.
variable rate mortgage (VRM)
Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
➥ A type of mortgage loan offered by brokers and lenders.
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