In choosing an open mortgage over a closed mortgage, you should consider your ability to prepay principal to make up for the higher interest rate on the open mortgage.

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With an open mortgage, borrowers can make prepayments without penalties, but the interest rate tends to be higher than with a closed mortgage. Therefore, if a borrower plans to make prepayments to pay off their mortgage faster, they may benefit from choosing an open mortgage. However, if prepayment is not a priority, a closed mortgage may offer a lower interest rate and save money over the long term.

In Choosing an Open Mortgage Over a Closed Mortgage, You