The difference between open and closed variable mortgages lies in their flexibility and interest rates. An open variable mortgage allows you the flexibility to pay off your mortgage at any time without any penalty. The trade-off, however, is that open variable mortgages typically have higher interest rates compared to closed variable mortgages. On the other hand, a closed variable mortgage has a set term and penalty for prepayment. However, closed variable mortgages typically have lower interest rates compared to open variable mortgages. Which type of mortgage is best for you depends on your financial goals, flexibility and budget.