A mortgage that, for a specified time, locks you into paying the mortgage for that period. It also locks in a mortgage rate for the same period, which doesn’t increase/decrease if rates do unless it is a variable-rate or adjustable-rate mortgage. Generally, if you break a closed mortgage, you will be required to pay the greater of a three months’ interest penalty or an interest rate differential calculation. The most common term for a traditional residential closed mortgage is five (5) years, and the most common term for a private residential closed mortgage is one (1) or two (2) years.