Which of the following best describes an open mortgage?

An open mortgage is characterized by the flexibility it provides to borrowers, specifically allowing them to make prepayments without facing any penalties. This means that if a borrower wishes to pay off their mortgage faster or make additional payments beyond the regular schedule, they can do so freely. This feature is particularly advantageous for individuals who may receive unexpected financial windfalls or prefer to reduce their overall interest costs by decreasing the principal balance faster.

The other options do not accurately describe the essence of an open mortgage. Fixed payments that cannot be altered pertain to closed mortgages, which do not offer the flexibility of prepayment. Locking in the interest for a set period refers to fixed-rate terms typical of many mortgage products but does not denote an open mortgage specifically. Lastly, the notion that an open mortgage is only available for first-time homebuyers is misleading; open mortgages can be available to various types of borrowers and are not exclusively restricted to newcomers in the property market.