open-mortgages

Open & Closed Mortgages

Print
PDF

Open Mortgages

An open mortgage allows you to pay off part or the entire mortgage at any time without penalties. Open mortgages usually have short terms of six months or one year. The interest rates are higher than those for closed mortgages with similar terms.

CLOSED MORTGAGES / FIXED RATE MORTGAGES

The expression 'closed mortgage' originates from the 1980's when this type of mortgage was literally 'closed'. You contracted to the lender to make your payments for the term chosen, you could not pay anything additional, nor could you pay off the entire amount for any reason except the sale of your property.

These days, there are many ways to pay down your mortgage principal quicker, though the name 'closed' mortgage still remains. See pre-payment options for ways to pay off your mortgage quicker.

Fixed rate mortgages are the most popular type of mortgage. You benefit from the security of locking in your mortgage interest rate, for lengths of time ranging from 3 months up to 25 years. The rates are slightly lower than for an open mortgage for the same term.

If you think interest rates could rise, you may want to choose a longer term, such as a 5 or 10 year term. If you think that rates are going lower, you may want to gamble on a shorter length of time. Discuss this with your mortgage broker.

The major lending institutions have different pre-payment options allowed under their contracts. These options allow you to pay off your mortgage faster. It is also possible to pay off most closed mortgages prior to the end of the term or pay down a portion of the balance owing. However, lenders charge penalties for doing so.

Please note that some lending institutions will not give any pre-payment options. It is wise to find out what options are available before entering into any mortgage contract.

Quick responses to your mortgage needs, complete explanations of mortgage details and structuring a complicated financing package are all part of the home financing transaction of today. It's our job to set and maintain the highest possible standards for a group of the finest mobile mortgage representatives to work in Canada. As a group, we have established for ourselves a set of criteria for our performance that most in the industry consider as the pinnacle of professional conduct.

Living up to these standards is not an easy feat. Which perhaps explains why, out of thousands of mortgage service providers working in Canada, only a select few have been hand-picked to service your mortgage needs, on this web site. Is it any surprise then, that in survey after survey over 90% of our customers say that they would recommend our Mortgage Professionals, to their family and friends thinking of obtaining financing for a home.

We look forward to assisting you with your mortgage needs.

join-our-team

find-icon

calc-icon



©2006 Real Mortgage Associates | 578 Upper James Street  | Hamilton, Ontario | L9C 2Y6
Licence # 10464 | 1 877 677 7778