Open

• Allows the mortgagor to prepay all or part of the principal amount at any time without notice
• Interest rates are higher on open mortgages than closed mortgages with similar terms

Closed

• Does not allow the mortgagor to make any pre-payment or early repayment except upon the sale of the property, in which case penalties are applied.

Partially Open (most bank mortgages)

• Allow only for certain, specifically described pre-payment privileges, i.e. only a part of the principal can be pre-paid once a year (e.g. 15% or 20% of the loan amount), normally on the anniversary date of the mortgage, borrower may also increase the payment amount by a specific amount.

NOTE: Very commonly OPEN Mortgage is confused with something called a Variable Mortgage and CLOSED Mortgage is confused with a Fixed Mortgage. One has nothing to do with the other. Both Variable and Fixed rate mortgages can be closed or open. Variable simply means that your mortgage interest rate will fluctuate during the TERM and Fixed means that your interest rate will remain unchanged during the entire TERM of your mortgage

Portable

• Borrower is able to transfer the existing mtg from a property being sold to another property which is being purchased. The balance and all other terms must remain the same as they are and most of the time the closing date of both the purchase and the sale should be on the same day.
• This option is great when a borrower is selling the property before the end of the TERM and wants to avoid paying a penalty for breaking the existing mortgage.
• This option is great also if the current interest rates are higher than the existing mortgage's rate, as client is able to keep the existing rate on the new property

Assumable

• In case a home owner is selling the property before the end of the TERM of the mortgage, instead of breaking the mortgage and paying a penalty, the Buyer may agree to take over (Assume) the Seller's mortgage under the existing terms (interest rate, balance etc.) and continue making the payments after the closing.
• This option will work mainly if the current market interest rates are higher than the existing mortgage on the property, this way the Buyer will avoid paying higher interest until the end of the TERM of the mortgage.