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A convertible mortgage is a variable-rate or short-term (e.g., 6 to 12 months) fixed-rate mortgage that can be converted to a longer term fixed-rate mortgage (e.g., three, five, seven, or ten years) at any time during the term. If you would like to take advantage of lower rates on short-term or variable mortgages but feel that interest rates may rise, the convertible mortgage offers you the ability of being able to convert to a longer term fixed-rate mortgage. Usually these are closed mortgages as opposed to open mortgages. Again, be mindful of the difference in the mortgage payment when you convert, and budget accordingly.

Plan ahead and be prepared. Speak with your mortgage professional and ideally your lawyer to understand the terms, conditions, restrictions, and options you may have with your mortgage.