What is Open Mortgage in Canadian mortgages?
A mortgage that can be paid off at any time without prepayment penalty. Rates are higher than closed mortgages. Used when the borrower expects to sell or refinance soon.
What is the Open Mortgage limit for Canadian mortgages?
Rate premium: 0.75–2.00% above closed mortgage rates
Open Mortgage example
Worked example
Seller waiting for property sale uses an open mortgage to avoid penalty when proceeds arrive.