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convertible adjustable-rate mortgage

convertible adjustable-rate mortgage definition - finance
A mortgage in which the interest charge can be converted into a fixed-rate mortgage in order to avoid rising interest rates, which would make the cost of the adjustable-rate mortgage rise sharply. Typically, a bank or other financial institution charge a service fee to transfer an ARM into a fixed-rate mortgage.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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