Open Mortgages

An Open Mortgage is a mortgage that permits repayment of the principal amount at any time, without any penalty. Repayment terms are more flexible than a closed mortgage, which do not usually allow for prepayment without penalty.

Open Mortgage can be very beneficial for people with income that varies, such as many self employed borrowers. If a self employed individual receives an extra $10,000 it can then be applied to the mortgage principal without interest.

It may also be beneficial for people who are expecting an increase in income in the future, and who will desire to repay as much of their mortgage as fast as possible. An Open Mortgage will allow the borrower to do so, without penalty, and the more applied to principal, the less interest the borrower will eventually pay on the mortgage.

Open Mortgage are available in shorter terms, 6 months or 1 year only, and the interest rate is higher than closed mortgages as much as 1%, or more.