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

Question

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With an open mortgage, the borrower has the flexibility to make prepayments without penalty, but the interest rate is typically higher. If the borrower anticipates having extra funds to make prepayments, then the open mortgage may be a better option despite the higher interest rate. Therefore, it is important to consider the likelihood of being able to prepay principal before choosing an open mortgage over a closed mortgage.

In Choosing an Open Mortgage Over a Closed Mortgage,you Should