Definitely one of the more common questions regarding mortgages. An open term mortgage gives you the flexibility to pay off your mortgage at any time without a penalty. The rate is usually higher (than a closed term) to offset the ‘no penalty’ at payout. In a closed term mortgage, you can usually pay down a portion of the mortgage without a penalty. However, if you pay it off in full, you’ll definitely have to pay a penalty. Penalties and payout privileges vary from lender to lender.
Hope this helps. Feel free to reach out if you have any mortgage or real estate questions.
