What are the differences between an open and closed mortgage?

With a closed mortgage, you’re normally given a prepayment privilege amount. This is a set limit to how much you can pay beyond your regular mortgage payments without a prepayment charge. Paying more than this amount will normally result in a prepayment charge. Tangerine only offers closed Mortgages.

An open mortgage is a mortgage which can be prepaid at any time, without requiring the payment of prepayment charges. A closed mortgage can't be prepaid, renegotiated or refinanced before maturity unless the terms and conditions of the closed mortgage are satisfied first, including the payment of a prepayment charge. Generally, banks charge a higher interest rate for open mortgages.