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Open Mortgages Toronto

Open Mortgages

One of the considerations when looking for a better mortgage is the amount of flexibility you want when repaying your mortgage.

Open mortgages Toronto offer you the best flexibility when it comes to repaying your mortgage. They allow you to repay in part or in full any time without imposing extra costs or penalty fees for early repayment.

The alternative would be a closed mortgage that offers a lower interest rate and a predictable mortgage payment schedule. However, if you pay more than the agreed upon amount or prepay the entire mortgage before the maturity date, you will be required to pay a penalty.

While you can pay off an open mortgage in full at any time with no penalty, a closed mortgage allows you to make limited penalty-free lump sum payments, usually only once a year and up to 20 per cent of the initial mortgage balance.

Features and benefits

An open-term mortgage allows you to:

  • Choose a fairly short mortgage term of between six months and five years
  • Repay any amount of your mortgage at any time
  • Make early or extra payments without any penalty fees
  • Convert to another type of mortgage before the end of the term without paying a penalty

A closed mortgage, on the other hand, allows you to:

  • Choose a longer mortgage term of up to 10 years
  • Enjoy a definite and predictable payment schedule
  • Adjust your payment annually: you can prepay up to 20 per cent of the original balance each mortgage year, or increase your payments by up to 20 per cent each mortgage year

Both open and fixed mortgages can be assigned to another party, plus you can choose whether you want a variable or fixed interest rate on your mortgage.

When should you choose an open mortgage in Toronto?

The main advantage of an open mortgage is its flexibility, so this option is usually recommended for borrowers who prioritize financing flexibility.

An open mortgage may be ideal if you:

  • Expect to receive a large amount of cash soon, like through a bonus, inheritance, sale of property, or other means, and intend to direct those funds towards the payment of your mortgage
  • Are likely to sell your house any time
  • Are considering refinancing to fund a home improvement mortgage before the end of the mortgage term
  • Plan to make large extra lump-sum payments frequently
  • Have uncertainty in your life that may require you to pay off the mortgage earlier – such as a serious illness, job transfer to a distant city, or a looming separation

Although many borrowers considering short-term financing still opt for closed mortgages, and pay the penalty if they pay out earlier, an open mortgage may actually be the best option depending on your situation. The key is consulting an experienced mortgage planner who will assess your specific situation and help you identify an open-term mortgage plan with the right selection of features.

Apply for your mortgage today!

Contact Northwood Mortgage™ to discuss your mortgage options, receive personalized mortgage advice, and get your mortgage concerns addressed. Our mortgage experts will help you make the right decision and direct you to lenders offering the best rates and terms for your case.


  • What is the difference between an open and closed mortgage?
    An open mortgage allows for partial or full repayment without penalties or bonus being charged. A closed mortgage does not allow for prepayments during the term. Most lenders that offer closed terms do offer the ability to make pre-payments but there are limits and if those limits are exceeded, then penalties will be applicable.
  • Can I get pre-approved for a mortgage through Open Mortgage?
    Yes. You can be approved for a fixed rate mortgage or a variable rate mortgage and fixed or open mortgage
  • What are the current interest rates at Open Mortgage?
    The lenders’ Prime rate plus 0.50% which equated to 7.7% today

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