Closed Mortgage

A Closed Mortgage is a mortgage that requires a borrower to pay a penalty for paying off or replacing it prior to the end of the scheduled mortgage term. Closed mortgages do offer the ability to make prepayments and extra payments to bring the mortgage amount down during the course of the term, however, when the mortgage is paid off in full, or if borrowers make extra payments that are larger than the allowable prepayment privilege --prepayment penalties may be applied.

The advantage with having a Closed Term Mortgage is that these mortgages often have lower interest rates, as well as a variety of other options. In particular, one advantage of these types of mortgages is an option that allows for a borrower to move his/her mortgage from their existing house to a new one if they are selling their home. In addition, Closed Term Mortgages offer security to borrowers who are not looking to move or pay off their mortgage within the scheduled term period, as they have a guaranteed interest rate as well as a fixed payment scheme.

For more information about closed mortgages, contact one of the qualified mortgage professionals at Alberta Mortgage or Apply Online.