An Open Mortgage allows you the flexibility to pay off some or all of the mortgage at any time, without a penalty. Interest rates are usually higher and are tied to the Bank Prime.
A Closed or Fixed Mortgage offers you the security of locking in your interest rate for the term of your mortgage, so you know exactly how much principal and interest you will be paying on the mortgage during the term. Terms range from 6 months through to 10 years. Should you wish to pay off some or all of the mortgage prior to the end of the term you will have to pay a penalty. 3 months interest or interest differential is standard.
A Variable Rate Mortgage allows take advantage of today’s low Prime Rate. Most variable rate products are set either at Prime or slightly below. The terms range from 3 – 6 years. Payments vary depending on the product or lender you choose. In some cases you can fix your payments for up to 5 years, but the interest rate will fluctuate as the Bank Prime Rate changes. In other cases your monthly payments will fluctuate depending on how many time the Prime Rate Changes during your term.