I think he is right also. Go ahead with the conversion as I do not see the rates going down this year. If the conversion is only a fee of 350.00 Pay it off also instead of putting it onto your balance. You would be paying a fee to have it added on, in the form of Interest! Anytime you have an option of paying cash for a service, do it rather than adding it onto your loan. A penny Saved is a Penny earned!! Thats why you are going with a smaller fixed rate in the first place. To save Money and get payments lowered or pay it off earlier! I am not sure what your balance is your paying or will convert to the lower rate but should save a lot more than that 350.00 fee.