Variable Rate Open Mortgages Explained

To own a home and be able to comfortably pay your mortgage, you need solutions that are tailored to your needs. This is why it is important to understand the different options that are available to you. One of the most popular solutions is a variable rate open mortgage. This is an option that can be used by many homeowners and has numerous benefits.

What is a Variable Rate Open Mortgage?

The variable rate open mortgage is the most common type of variable rate mortgage. Variable-rate open mortgages offer a slightly higher interest rate, but allow borrowers to pay off the mortgage in part or in full at any time without penalty—and can be refinanced or renegotiated without prepayment penalties.

For example, if interest rates drop and the borrower wants to refinance their mortgage, they can do so without paying a prepayment penalty. This is an important feature for homeowners who want to take advantage of lower interest rates in the future.

Is a Variable Rate Open Mortgage Right for Me?

This type of mortgage can be a great solution for anybody, but it is most convenient for individuals who;

  • Want to make additional payments, as this mortgage is fully open, so you can repay up to 100% of your mortgage. This means you can pay off your entire mortgage at any time, without penalty and without a prepayment penalty.
  • Want the option to take advantage of current interest rates by converting to a Closed, Fixed-Rate Mortgage? That is to say if you’re not sure how long you plan to stay in your home but would like the option of locking in a low rate if it becomes available.
  • Want a variable rate for the term that could save you money, or could cost you a little more, at any given time? In that case, the initial rate may not be as important to you. You can always lock in a lower rate later, if it’s available.

The benefits and drawbacks of a variable rate open mortgage

One of the greatest benefits of a variable rate open mortgage is the flexibility that it offers.

You can choose to make additional payments or pay off your mortgage early, at any time. This is great if you’re looking to pay off your mortgage sooner.

According to the Financial Post, variable rates come with more uncertainty; however, the lower rates can work in your favour.

On the flip side, a variable rate open mortgage will cost you more in interest over the life of your loan. If interest rates increase, you could end up paying more than if you had chosen a fixed-rate mortgage.


A variable-rate open mortgage may just be the solution to owning your dream home. For more information or to discuss all potential options please contact me anytime. I specialize in a client-first approach and ensuring that my clients receive the exact mortgage product to suit their specific needs.



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I love being a Mortgage Specialist in this beautiful Okanagan Valley.

My passion lies in creating strong, lasting relationships with my clients and their families. Talk to me about your hopes, dreams and goals. Provide me with transparency and I will provide you with the absolute best mortgage solution and rates to meet your needs.

~ Bonnie Thorlakson
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