May 12, 20263 min read
The simple version is easy; the mortgage-specific details are where the answer becomes valuable. Many variable mortgage contracts allow the borrower to convert to a fixed term with the same lender, but the available fixed rate and term are determined at the time of conversion.
How the mortgage math works
Here is what matters most:
- Read the conversion clause before signing the variable mortgage; policies differ by lender.
- The fixed rate offered later may be higher or lower than rates available when you originally took the mortgage.
- Some lenders require the new fixed term to be at least as long as the time remaining on the variable term.
- Converting is different from breaking the mortgage and moving to another lender, which may trigger a penalty and legal costs.
If certainty becomes more important, compare the lender's conversion offer with the cost of switching elsewhere.
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
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