DCHP-2

convertible mortgage DCHP-2 (October 2016)

• n. — Finance, Administration

  a mortgage that starts out as a closed mortgage with the option to extend its maturity date without penalty.

  Type: 5. Frequency — Convertible mortgage is used more frequently in Canada than in the US (see Chart 1). This meaning of convertible is quite similar to the meaning reported in the OED-3, s.v. "convertible" (3b) relating to bonds, loan stock and the like 'that can be converted into other shares [...] on a preferred basis, typically within or at a predetermined time'. The meaning relating to mortgages seems to be an extension of the established meaning, which goes back to the mid-1800s relating to bonds (see, e.g., the 1873 quotation). Note, however, that the convertible period is not generally very long (see the 2015 quotation).
  See also COD-2, s.v. "convertible" (4), which is marked "Cdn".

  See also: closed mortgage