Legal Definitions - rollover mortgage

A rollover mortgage is a type of adjustable-rate mortgage where the lender can adjust the interest rate periodically based on market conditions. The mortgagee must renegotiate the terms of the mortgage every three to five years.

• John has a rollover mortgage on his house. His interest rate is adjusted every three years based on market conditions.
• Sarah's mortgage lender requires her to renegotiate the terms of her mortgage every five years. She has a rollover mortgage.

These examples illustrate how a rollover mortgage works. The mortgagee must renegotiate the terms of the mortgage periodically, which can result in changes to the interest rate and monthly payments.