Best 10-Year Fixed Mortgage Rates
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Best 10 Year Fixed Mortgage Rates in Canada
The 10 year fixed mortgage rate is the most risk-averse choice, if the borrower needs to budget for long term or simply believe that the interest rates will dramatically rise over the approaching years, then this mortgage term may make some good sense. For instance, if a borrower feels that they are certain that in mortgage rates will be higher in five years than the currently quoted rate, locking in for the long term is a better strategy.
How Popular is 10 Year Fixed Mortgage Rates in Canada
The 10 year fixed mortgage rate is not as such popular since only 7% of the mortgage borrowers have terms ranging between 6 and 10 years. In short, long-term mortgage rates are not popular options in Canada. In fact, their popularity among the younger age groups is even less at about 3% for those between 18 and 34 years of age. Generally, fixed mortgage rates are the most popular in the country, with 66% out of all the mortgages.
Pros & Cons of a 10yr Fixed Mortgage Rate
The 10 year fixed mortgage term is chosen by a few people due to the following reasons;
- It offers much longer rate than the 5 years fixed rate.
- It gives the borrower a payment certainty as compared to the 5 years fixed mortgage rate.
However, the 10-year fixed term also has disadvantages:
- Early termination of the term attracts higher penalties. The penalties of the major banks can be really extreme since the calculations are done using the posted rates of the bank rather the actual rates.
- The 10 year fixed mortgage rates cost borrowers more interest historically as compared to the shorter-term fixed and variable rates.
- Just a small number of people keep their home for as long as 10 years. This, in turn, raises the odds that the homeowners will renegotiate prior to maturity and make the penalty payment to abandon the 10-year fixed mortgage term.
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