You've seen convertible cars, convertible sofas, and even convertible pants. Now the banks are telling you there's such thing as a convertible mortgage, too! If you've never heard of a convertible mortgage, you'll be at a disadvantage when it comes time to visit a Toronto mortgage broker and hammer out your options. This article should help you understand this new type of mortgage and allow you to figure out if a convertible mortgage the right type of mortgage for you.

Normally when you buy Liberty Village condos, you take out a mortgage that gives you between ten and twenty years to pay off the full amount of your loan in managed increments augmented by the bank's interest rate. This type of mortgage is called a long term mortgage. There are also short term mortgages where you have between six months and three years to pay off your loan. With a convertible mortgage, the initial term is very short, usually six moths, but you have the option to convert it to a standard long term mortgage at any point during your initial term.

Convertible mortgages come with a fixed interest rate during the initial term, which can be a good thing if the Calgary mortgage market is in flux, then lets you renegotiate the rate when the six month term is up. It also allows you to make additional payments ahead of schedule to avoid interest fees without paying a penalty. You also have the option of increasing your payments as much as double and put the extra amount directly toward the principal. All in all, it gives you more options than a standard mortgage.

On the pro side of the convertible mortgage equation, this type of mortgage gives you a lot more control over your money and your repayment schedule. However, like any mortgage in Canada, you have a set period of time in which to make a decision and once you have made it you are locked into it for many years, which can be a disadvantage if the rates or your circumstances change.

Convertible mortgages are a good idea if you need a Mississauga mortgage right away but would like some more time to think before committing to a mortgage that you'll be locked into for five, ten, or even thirty years. They're also good for people who think they may be able to pay off their mortgage over a short term but want to keep their options open in case their money source, such as an income, investment, or inheritance, falls through.