top of page

The pros and cons of a closed mortgage

A closed mortgage is a type of mortgage that has a fixed interest rate and a set term.

This means that your monthly payments and interest rate will remain the same throughout the term of the mortgage.

Here are some of the pros and cons of a closed mortgage.


  • Stability and predictability. With a closed mortgage, you know exactly what your monthly payments will be for the duration of the term. This can make it easier to plan your budget and manage your finances.

  • Fixed interest rate. A closed mortgage has a fixed interest rate, so you don't have to worry about interest rate fluctuations. This can provide peace of mind and protect you from potential increases in interest rates.

  • Potential for lower interest rates. Closed mortgages often have lower interest rates than open mortgages, so you may be able to get a better rate if you choose a closed mortgage.


  • Limited flexibility. With a closed mortgage, you're locked into a set monthly payment and interest rate for the duration of the term. This means you may not be able to make extra payments or increase your payments without incurring penalties.

  • Potential for higher interest rates. If interest rates go down during the term of your closed mortgage, you may end up paying more in the long run than if you had chosen an open mortgage.

  • Prepayment penalties. Some closed mortgages may come with prepayment penalties, which means you'll have to pay a fee if you want to pay off your mortgage early.

In conclusion, a closed mortgage offers stability and predictability, but it may also come with some limitations and potential costs.

It's important to carefully weigh the pros and cons before deciding if a closed mortgage is right for you.


bottom of page