What is an open mortgage?

In Canada, home buyers can choose from several types of mortgages, including open mortgages. Find out how open mortgages work, as well as the pros and cons.

With an open mortgage, you may have different options to pay down your mortgage faster, depending on your lender and your mortgage agreement:

Making lump-sum payments up to a certain amount or percentage of your original mortgage
Increasing the amount of your mortgage payments by a certain percentage
Doubling up on a mortgage payment each year
Accelerating your mortgage payments (for example, from monthly to biweekly, or biweekly to weekly)

Example: “When Erdem’s mortgage came up for renewal, he chose an open mortgage because he knew he planned to sell the home soon and wanted to avoid a prepayment penalty.”

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