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.
An open-term mortgage allows you to:
A closed mortgage, on the other hand, allows you to:
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.
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:
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.
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.
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Are you in the market for a mortgage or want to refinance your current mortgage? Then you have come to the right place.