What is an "open mortgage"?

An open mortgage is characterized by the flexibility it offers to borrowers regarding repayments. It allows the borrower to make full or partial payments toward the principal without incurring any penalties. This feature makes open mortgages appealing for those who may wish to pay off their mortgage more quickly or increase their payments when financial circumstances permit.

In contrast, other types of mortgages, such as closed mortgages, typically impose penalties for early repayment, making it more difficult for borrowers to alter their repayment plans without incurring extra costs. Open mortgages are particularly beneficial for individuals who anticipate fluctuations in their income or who plan to pay off their mortgage ahead of schedule. The additional options associated with open mortgages provide borrowers with greater control over their financial commitments associated with their property.