Open mortgages allow you to pay off all or a portion of the mortgage at any time. You generally have to pay a higher interest rate for open mortgages since they offer this early payment privilege. Also, open mortgages tend to be for shorter terms than fixed mortgages (also called closed mortgages). Usually open mortgages have terms of six months or a year.
Open mortgages are particularly beneficial in situations where you are planning to pay off much of the mortgage in the near term. For example, if your house is for sale or you are expecting a large sum of money from the sale of a cottage or other asset, you should consider an open mortgage so that you can use this month to pay down your mortgage without penalty.
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