Mortgage Options
When it comes to the type of mortgage, you’ve got a lot of options. The choices you make will depend solely on your personal situation. Your income and risk tolerance may affect whether you select a fixed or variable interest rate. Other factors that may influence your decisions can include the reason for purchasing your home and how you will use it. Depending on your intentions, you may choose an open, closed or convertible mortgage term.
Open Mortgage
An open mortgage option may be appealing to you if you are planning to pay your mortgage off in the near future. There is no prepayment charge when your mortgage is repaid in part or in full at any time. Open mortgages can also be converted to any other term at anytime without additional interest. The interest rates are generally higher compared to a closed mortgage because of the additional prepayment flexibility.
Closed Mortgage
If you’re not planning to pay out your mortgage in the short term, choosing a closed term mortgage would be your better choice. The interest rates are generally lower for closed term mortgages when compared to an open mortgage term of the same term. A closed term mortgage offers you the capability to pay off your mortgage sooner with BMO’s Mortgage Prepayment Option and save on interest costs.
The Mortgage Prepayment Privilege
The Mortgage Prepayment Privilege lets you pay down your mortgage faster and can save you thousands of dollars on your mortgage. Here’s how it works.
Increase your mortgage payments (principal and interest)
Increase the amount of your mortgage payment by 20% over the current mortgage payment, or 10% for a Low Rate Fixed Closed Mortgage, once per calendar year without added charge.
Make lump sum payments
In addition to increasing your mortgage payments, you may prepay in $100 increments each year without added charge, up to:
- 10% of the original mortgage amount for a Low Rate Fixed Closed Mortgage; or
- 20% of the original mortgage amount , for any other kind of closed mortgage.
- Some conditions apply.
How much can I save?
Find out with the Mortgage Prepayment Calculator
Convertible Mortgage
A convertible mortgage is a short-term closed mortgage that offers the flexibility to convert to a longer fixed rate term (of one year or more) without penalty, possibly to take advantage of low interest rates.
Once you’ve determined the mortgage term you’re most comfortable with, you’re next decision will be choosing between a fixed or a variable interest rate mortgage.
Talk to a BMO Mortgage Representative
Locate a Mobile Mortgage Specialist near you, call 1-877-CALL-BMO or visit your nearest branch to speak to a mortgage representative.
- 1-877-225-5266
- Mortgage Specialist
- Locate a Branch
- Apply Online
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