10 Year Fixed Mortgage

How To Choose The Best 10 Year Fixed Mortgage Rate

In Canada, mortgages are offered in terms of 1, 3, 5, 7 and 10 years. The longest ten-year fixed-rate mortgage term in a Canadian lender’s product line-up offers homeowners more security over their monthly payments and lower stress about future interest rates, as they will remain flat for the duration of the loan. 

The majority of consumers choose a 3- or 5-year mortgage term over the longer term. However, as the difference between 5-year and 10-year bonds narrows, lenders are offering even better interest rates on 10-year fixed mortgages. This means you should consider taking out a 10-year fixed mortgage as an appealing option. 

Find out how the competitive rates on 10 year fixed mortgages benefit you.

What Are 10 Year Fixed Mortgage Rates?

The “10” in a 10-year mortgage term is the amount of time you lock your current interest rate and does not correspond to the amortization period. In this case, it means that at the end of ten years you will have to renew or refinance your mortgage with another rate available at the time. 

Having a 10-year fixed-rate mortgage is a contract with your lender. If you break the terms before their end, there will be hefty penalty fees.

Why Are 10 Year Fixed Mortgage Rates Gaining Popularity?

More people are choosing 10-year fixed-rate mortgages because the gap between 5-year and 10-year bonds has narrowed considerably. The resulting increase in affordability makes lenders offer more competitive low rates on 10-year fixed mortgage rates. 

Most 10-year mortgages will incur a penalty if the term is broken early, so it’s important to be aware of this before signing a contract.

Benefits And Drawbacks Of A 10 Year Fixed Mortgage Rate

Benefits

Competing interest rates allow for increased savings over a 10-year term.

Consistent monthly payments for 10 years.

Convenience.

By protecting yourself against interest rates rising over time, you can reduce your debt load.

Ideal for investors, 10-year mortgages offer high levels of cash flow stability by providing low volatility in the monthly payments and tax-deductible interest.

Save time and reduce the stress of not having to renew and requalify for mortgages as often.

Less worry about having to renew your mortgage at high rates as opposed to shorter terms.

Drawbacks

10-year mortgages are usually much more expensive than 5-year fixed rates and variable rates.

Breaking your 10-year mortgage within the first five years will result in extremely high prepayment penalties.

If interest rates drop, homeowners will not be able to lower their payments.

Why Should I Choose A 10 Year Fixed Mortgage Rate?

Ten-year mortgages are relatively stable and low risk because the payment remains constant over a decade. This makes it sensible if you think mortgage rates will rise significantly in the future or you want to plan for long-term financial commitments. 

Although it can be challenging to predict future interest rates, many people are hesitant to opt for a 10-year term. However, locking in a 10-year rate when rates are low will certainly save you money over time. The 10 years fixed mortgage rate offers a great deal if you plan on staying at the same job, do not have plans to relocate or sell your home within 10 years.

The Bottom Line

It is worth considering a 10-year term if you want greater stability and are willing to sacrifice flexibility. Breaking a 10-year mortgage early incurs a penalty, so before signing the contract make sure that you are prepared to live in your home for at least five years. Breaking it early before five years incurs even higher penalties, so ensure you’re ready to settle down and stay until the for at least five years. 

Some lenders could cover the appraisal and legal fees if you switch to a 10-year term, but they do this because the finder’s fee is higher for them. When shopping for a 10-year fixed mortgage, consumers typically stand to benefit from the competitive interest rates offered. Find out how you can benefit from the competitive interest rates offered by our 10 year fixed mortgage rates.

Compare Rates And Get A Personalized Quote!

When searching for the perfect mortgage loan, it can feel overwhelming with so many different options available. We will work to find a loan that will allow you to keep more of your salary every month and meet your budget in the best way possible.  We will tailor a loan specifically for your financial situation. 

We provide a variety of loans with competitive rates to help you save even more. Apply today!