- This topic has 2 replies, 2 voices, and was last updated Mar-2210:07 am by
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Up6
A mortgage that starts at a fixed rate initially and is converted to a different fixed rate at a later date is most likely referred to as a:
- A. hybrid mortgage.
- B. rollover mortgage.
- C. convertible mortgage.
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Up2
The correct answer is B.
A mortgage that starts out with a fixed rate and converted to a fixed rate later is referred to as a rollover or renegotiable mortgage. These are often used in Canada, Germany, Denmark, etc.
If the mortgage starts at a fixed rate and is later converted into an adjustable rate mortgage, then we would say this is a hybrid mortgage.
A convertible mortgage is an adjustable-rate loan that gives the borrower the option to convert the loan to a fixed-rate mortgage.
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Up1
Thank you for the detailed and detailed answer. I think that everyone intuitively guessed which answer was correct. It is worth adding more complex tasks to think about the answer. I have recently been very interested in real estate and mortgages.
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