What’s The Difference Between An Open And A Closed Mortgage?

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Whats The Difference Between An Open And A
Closed Mortgage?
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• When it comes to buying a home, there are many
  options available to suit every need, and just as
  there are choices of properties, there are
  varying mortgage options, too. With closed, open,
  variable, fixed, 3-year, 5-year and so on, there
  should be a mortgage out there for you, and when
  you meet with a mortgage broker, they will talk
  you through your options. One of the points they
  will discuss with you, is whether you want an
  open mortgage or a closed one, and as each is
  designed to suit different borrowing needs, its
  important that you make the right choice.

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• Here is some basic information about the two
  types of mortgages, so that when you meet with
  your chosen mortgage broker, you wont have to
  start your discussion from scratch
• Open mortgages in brief
• These have flexible options that increase your
  mortgage repayments and enables you to increase
  your regular payments or do so with a lump sum.
• Closed mortgages in brief
• A closed mortgage penalizes you if you pay off
  all, or part of your mortgage early, and offers a
  much lower rate of interest.

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• Should you choose an open or a closed mortgage?
• Certainly here in Canada, the more popular
  mortgage is a closed one with its lower rate of
  interest, most people find that they dont need
  the option of being able to pay it off or
  increase their payments, and so choose a closed
  mortgage over the flexibility of an open one.
  Offering better value for the average Canadian, a
  closed mortgage can save you a significant amount
  of money over the duration of its term.
• Those who opt for an open mortgage, usually do so
  because they expect to receive extra cash to pay
  it off in the near future, whether it be from an
  inheritance, a significant pay increase or the
  proceeds from the sale of a property.

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• If you expect to receive a substantial sum of
  money weeks or months after youve bought a new
  property, then a more flexible, open mortgage
  might prove its worth for you.
• Closed mortgages with variable rates of interest
• Your mortgage broker will be able to explain
  closed mortgages with variable rates to you in
  more detail, but in essence, these tend to have
  lower prepayment penalties than closed mortgages
  with fixed rates. If you think you might need to
  refinance or pay off your mortgage, then this
  mortgage might give you the lowest rates while
  limiting the potential size of any prepayment
  penalties.

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• Mortgages can be complex, and its not always
  easy to see which one will best suit your needs,
  however, if you seek advice and guidance from a
  professional mortgage broker, your options should
  become easier to understand and youre more
  likely to make the right choice for your
  circumstances.
• Mortgage-broker-Calgary is your best resource for
  finding a mortgage for your property. Luke Wile,
  is the best calgary mortgage broker and is proud
  to serve clients from across Canada, while being
  centered in Calgary, Alberta. Luke is proud to
  serve his clients with a personalized approach to
  finding his clients the best and lowest Canadian
  interest rates and terms offered by the major
  banks and private lending institutions. If you
  are looking for an independent mortgage broker in
  Calgary AB, with Luke Wile you can get fast and
  personal expertise for your mortgage!