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Find the best 3-year variable open mortgage rate

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Best 3-year variable open mortgage rates

As of:


Bank of Montreal


3-year variable open rates: Frequently asked questions

What are 3-year variable mortgage rate?

Are variable rates better than fixed rates?

What is an open mortgage?

Are open mortgage better than closed mortgages?

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A guide to 3-year variable open mortgages

3-year variable open mortgages are not particularly common in Canada, but like all niche mortgage products, they serve a particular purpose very well. With the combination of a short term, a variable rate, and an open mortgage, this may well be the most flexible product on the Canadian mortgage market. But of course, there may be cheaper alternatives, depending on your situation.

When does a 3-year variable open mortgage make sense?

A 3-year variable-rate open mortgage makes sense when you need flexibility in your mortgage, and don't mind a variable rate. An open mortgage does mean you'll be paying a higher interest rate than you would on a closed mortgage, but it lets you pay off as much of your mortgage as you want at any time.

If you're expecting a large amount of money to come your way soon (an inheritance, for example) then an open mortgage would allow you to use that money to pay off your mortgage without any penalties.

Another situation this product could be useful would be if you were planning to sell your home in the coming years, and want to pay off your mortgage in full once the sale goes through. An open mortgage allows you to do that without penalty.

Open vs. closed variable-rate mortgages

Before taking out an open mortgage, it's important to consider whether the higher mortgage rate (compared to a closed mortgage) will end up costing you more than it would cost to break a closed mortgage early. Depending on the size of your mortgage and the amount of time you expect will pass before you pay off the mortgage, it might be the case that a closed mortgage is a better financial decision. This is especially the case with variable-rate mortgages, which tend to have lower prepayment penalties than fixed-rate mortgages.

Whether an open or closed mortgage makes sense for you depends a lot on your financial circumstances and future plans. The best thing to do is to speak to a financial planner or licensed mortgage broker to fully understand the financial implications of both options.

Jamie David, Director of Marketing and Head of Mortgages

Jamie has 15+ years of business and marketing experience. She contributes her mortgage expertise to The Globe and Mail and authors Ratehub’s mortgage and homebuying guides. read full bio

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