Difference between Open and Closed mortgages

Open mortgages gives you a flexibility to pay it off anytime you want. You can pay off any amount you would like. You need this mortgage if you are planning to pay a significant amount towards your mortgage or if you just want to pay off completely and close. You do not want to get an open mortgage if you are planning to keep the house because Canadian mortgage rates on open mortgages are higher than closed mortgage rates. Because open mortgages are riskier for banks (you can switch lenders, pay off and close and do whatever you want) that is why the interest rates on open mortgages are higher.

Closed mortgages on the other hand have low interest rates. If you are not planning to pay off the mortgage, you are better off going with the closed mortgage to save money on interest payments. Most lenders will still let you make additional payments towards your mortgage with the closed mortgage to make it easier for you.

If you are still undecided, start a new mortgage request today and let our mortgage specialists provide some options to you.

 

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