With an open mortgage, you can pay off as much of your debt as you wish, whenever you want, without penalty. This could allow you to pay off your mortgage more quickly (assuming you have the cash flow to do so), potentially saving you thousands of dollars in interest over the long run. If you want flexibility, an open mortgage can be a good option.

A closed mortgage is one which is for a set term and with fixed conditions. In some cases, the agreement allows pre-payment although a penalty may be charged. While most closed mortgages in Canada do offer a range of penalty-free, partial pre-payment privileges, options differ between lenders so make sure to compare. In contrast to an open mortgage, the interest on a closed mortgage is usually lower. In a situation where interest rates are rising, it could be to your advantage to lock in. If your income is static, and you want the security of guaranteeing your monthly payments over an extended period, this may be the choice for you.

All mortgages are fully open at the end of their term. This allows you to repay all or part of the outstanding principal without penalty on the maturity date.