What Mortgage product is best for me?

[EARTHY]

1. I want a 25 year mortgage, but I want to be able to close it off before 25 years If I can pay it off.

2. I want to make as many payments (in whatever amounts) as I can whenever I can.

I am thinking some type of open mortgage.

[rems]

1. I want a 25 year mortgage, but I want to be able to close it off before 25 years If I can pay it off.

2. I want to make as many payments (in whatever amounts) as I can whenever I can.

I am thinking some type of open mortgage.

realistically, how big would the extra payments be?
Some closed mortgages allow up to a certain percentage of the mortgage to paid off every year.

[EARTHY]

realistically, how big would the extra payments be?
Some closed mortgages allow up to a certain percentage of the mortgage to paid off every year.

I can't predicate future income, however the extra payments would be whatever income I have left over after my living expenses.

Not knowing my future income, what would be the best type of mortgage?

[circa76]

I wouldn't bother with an open mortgage, unless you expect to come into some sort of windfall.

Usually the 100% payment increase and 10-20% annual pre-payment is more than enough for most people.

E.g.

Suppose you take out a 300K mortgage, and have an annual pre-payment priviledge of 10%. That's 30K every year that you can dump into the mortgage.

do you honestly believe that you'll have more than 30K every year to do that?

Note that this assumes that your pre-payment privleges are based on the initial mortgage amount, not the remaining balance (which is what my mortgages have been thus far)

[AllWheelDrift]

Mortgages can be classified in a couple different ways.

Open vs Closed
Open means you can pay off the entire mortgage any time without penalty.

Closed means you can't, however most closed mortgages still have some prepayment privileges which will vary between lenders. Usually you can make a lump sum repayment of somewhere 10-25% every year. Often you can double up any of your regular payments (no limit).

Fixed vs Variable
Fixed mortgages are almost always Closed and they come in varrying terms, with 5 years being the most popular. If you get an Open Fixed it's usually for a shorter term and at a high rate that's quite high compared to a Closed Fixed.

Variable mortgages are usually avaiable as Open or Closed with Open usually only having a slightly higher rate than a Closed. Again, these tend to be 5 year terms. They usually give you an option of converting to a Closed Fixed mortgage during your term, though with an Open Variable you always have the choice of taking your business elsewhere with no penalty. Similar to Open Variable would be an "All-In-One" type account where your mortgage is replaced by a HELOC and your minimum payment is interest only and there's no limit to prepayments. The interest rate for an "All-In-One" type account usually is a bit higher than an Open Variable though.

I think the first question you should decide on is fixed vs variable. Then you need to pick a mortgage with prepayment terms flexible enough. One thing to keep in mind is when it comes time to renew your mortgage after your term (usually 5 years) is you can switch types and you can repay as much as you want without penalty even if you had a closed mortgage.

I'm guessing you would have problems maxing out the prepayments on a Closed Fixed mortgage with generous prepayment options at least for your first term.