Does interest rate or prime go up or down on closed variable mortgage?
Being an open end or closed end loan has nothing to do with the interest rate. A closed end loan means that there’s a regular term of some number of years, and when that time expires the loan should be paid off if you made all the payments. These loans can be fixed or adjustable rate loans. An opened ended loan is a line of credit. You have some amount of time to use the line as you choose, making some kind of minimal payment of either interest only or a small percentage of the balance, and making the funds you have repaid available again to you. At the end of the “open” time, you have some additional time to finish paying it back even though you can’t use it anymore. The open time is usually 15 years and the payback time is usually 10, but not always. These are usually variable…I’ve never seen a fixed rate line of credit.
