Common use of Open or closed term Clause in Contracts

Open or closed term. If the mortgage gives you, at all times during the term of the loan, the right to prepay all of what is owed without a prepayment charge, the mortgage product is open. Otherwise, the mortgage product is closed. A Convertible term is closed. We sometimes use the words "limited prepayment" for "closed."

Open or closed term. If the mortgage contract gives you, at all times during the term of the loan, the right to prepay all of what is owed without a prepayment charge, the mortgage product is open. Otherwise, the mortgage product is closed. A Convertible term is closed. We sometimes use the words "limited prepayment" for "closed."