What is an adjustable-rate mortgage that allows the borrower to change to a fixed rate mortgage called?

An adjustable-rate mortgage that allows the borrower to convert to a fixed-rate mortgage is known as a convertible ARM. This type of loan offers initial interest rates that are lower than fixed-rate mortgages, but they can fluctuate after a specified period, which can lead to changes in monthly payments.

The key feature of a convertible ARM is the borrower’s ability to transition to a fixed-rate option at certain points in time. This flexibility can be beneficial for borrowers who might want to take advantage of lower initial costs and then secure stability by locking in a fixed rate when they feel it's advantageous.

The other options do not accurately define this specific feature. A fixed ARM suggests that the mortgage is fixed, which would not describe an adjustable-rate feature. A standard ARM is a general term and doesn’t imply any conversion feature. Lastly, a variable rate mortgage does not specifically indicate the option to convert to a fixed rate, as it simply refers to a loan where the interest rate can change over time based on market conditions.