Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

CFA Events Calendar

View full calendar

Recommended Discussions

See how our partners can help you ace your CFA exams.

CFA Level 1 Question of the Week - Fixed Income

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:
AnalystPrep
CFA Question Bank, Video Lessons, and Study Notes can be found at https://analystprep.com 
Register today for 120 free practice questions and 10 hours of video

CFA Level 1 Question of the Week - Fixed Income 6 votes

A. hybrid mortgage.
33% 2 votes
B. rollover mortgage.
33% 2 votes
C. convertible mortgage.
33% 2 votes

Comments

  • 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.
    AnalystPrep
    CFA Question Bank, Video Lessons, and Study Notes can be found at https://analystprep.com 
    Register today for 120 free practice questions and 10 hours of video
Sign In or Register to comment.