10 Year Fixed Mortgage Rates
Compare today's current mortgage and refinance 10 year fixed interest rates.
For borrowers looking to spend the least amount in interest but want the stability of a fixed amount, the 10 year mortgage is a loan worth considering. Fixed mortgages are popular because most buyers look to build a budget based on a steady payment plan, and the 10-year fixed-rate mortgage offers just that: a set monthly loan payment combined with a quick pay-off. However, along with that short term comes a hefty payment each month, so borrowers really need to “crunch” the numbers when considering this option.
What is a 10 year fixed-rate mortgage?
The 10 year fixed-rate mortgage is a home loan which maintains the same interest rate and monthly payment for the life of the loan. This is normally the shortest term offered by lenders, and therefore offers the lowest interest rate among popular fixed mortgages. Although few borrowers choose a 10 year term for an initial purchase, this is a great option for refinancing.
Important interest rate factors:
Even though the 10-year fixed-rate mortgage offers some of the lowest interest rates, you must keep in mind some important financial factors driving all mortgages:
- FICO score. Your personal financial “reputation” is reflected in your FICO score. A rating of 700+ is considered a good score.
- Mortgage use. Typically refinance mortgages are slightly higher than purchases.
- Property Use. Lenders are eager to offer the best rates for primary homes, with higher interest rates for second homes and rental properties.
- LTV (loan-to-value) Ratio. When borrowing a higher percentage of the home’s purchase price or value, the interest rate is usually higher (banks see you as a higher risk).
- Jumbo vs. Conforming Loans. Jumbo loans exceeds the conforming lending limits set by the federal government. Only the highest qualified borrowers are eligible for a Jumbo loan.
- Location. Local economic factors can affect mortgage interest rates. A stronger economy means a stable real estate market and lower interest rates, where a less stable economy and real estate market could equate to a higher risk for foreclosure and thus, higher interest rates.
- Buydown. When borrowers put some money down up front to lower the interest rate, they can save thousands of dollars. This option isn’t always the best choice and one to discuss with your lender.
The proof is in the details – Interest rate vs. APR (there is a difference):
You will see these terms and may believe they are one and the same, used interchangeably. But the truth is that they are different, and that difference adds up to additional dollars out of a borrower’s pocket.
- Interest Rate. This is the percentage you may to borrow money from your lender, paid in installments over the set life of the loan. At the end of your loan (whether you pay it off at the maturity or at any point during the loan), you will pay the principal (the amount you borrowed) and the interest which has accumulated. As you pay your principal balance down, the amount of the payment which is principal and interest is skewed, allowing you to pay more towards your principal with each payment, called mortgage amortization.
- APR (annual percentage rate). This reflects the interest rate (see above) plus the fees and expenses which come with your loan, like private mortgage insurance, any prepaid interest, or other possible fees you paid to the lender which are rolled into this amount. This number, therefore, will be slightly higher, and is a more accurate rate of the interest you pay. Law requires your lender to provide this information on both your loan estimate and your closing disclosure.
Is a 10-year fixed rate mortgage right for you?
Potential for lower interest payments. With the lowest interest rates, you can save a significant amount of money in interest when compared to longer-term mortgages.
Build equity quickly. Paying your mortgage off in 10 years allows you to build equity in a relatively short period of time. You see a return on your investment rapidly.
Pay your mortgage off faster. If you choose a 10-year mortgage, it won’t be long before you have a nice chunk of change each month that you didn’t have before!
High mortgage payments may be restrictive. In the mortgage world, 10 years is a short time period. Therefore, borrowers must budget a relatively large monthly payment. Should you face any financial troubles, lose your job or experience financial hardship, making a large payment could be difficult.
Hard to qualify. The large monthly payments preclude many borrowers from having the right debt-to-income ratio which enables them to manage such a large payment.
Large payments may prevent other investments. Many borrowers still choose to invest money in other avenues, and having a large month payment may mean less of your disposable income is available to use for retirement, college tuition, or other large investments.
A typical 10-year fixed mortgage consumer
A 10-year fixed mortgage usually offers the most competitive interest rates, and is a great choice for those looking to refinance their existing mortgage and get out from under a higher rate. Like all other mortgage products, its best to shop around and find out what lenders charge for closing costs and fees, as some may impose steeper costs/fees for refinance and shorter-term loans.
Start the process for a 10 year fixed mortgage today
Start the process for either a purchase or refinance 10 year fixed mortgage and have a licensed loan officer contact you for a custom quote today.
What is a 10 year fixed mortgage?
A less common option, the 10-year fixed mortgage loan which allows borrowers 10 years to pay off the balance at an interest rate which will not change over the 10-year life of the loan. Rates are usually much lower than more traditional 30- and 15-year loan lengths and of course, you will be paying a lot less in interest in that 10-year period.
How does a 10 year fixed mortgage work?
The best interest rates often come with the shortest terms. Like all other fixed rate loans, the interest rate is locked in at the time you obtain the mortgage, and cannot increase (or decrease), no matter the change in rates offered by lenders later. When interest rates are low, you can lock in a great rate and start paying big chunks of principal right away on your loan with a 10-year mortgage.
Is a 10 year fixed mortgage loan a good idea?
The 10-year rate allows you to reach full ownership with lightning speed (in the home buying world) but isn’t right for everyone. Great for many physicians, if you have a steady (or increasing) income and few other high interest debts, you may be interested in the high payment, high return elements of a 10-year fixed mortgage.
Lock in your 10 year fixed rate today
With a wide variety of financing options, a loan officer can help you find and lock in the best 10 year fixed rate for purchasing a home or refinancing your existing mortgage. Contact us to get started today!
10-year fixed mortgage rates change daily and are determined by 5 major driving factors which you can control: Property type and use, loan-to-value ratio, your FICO score, and whether you are purchasing or refinancing the mortgage.
Getting the lowest 10-year fixed jumbo refinance rate depends on 4 main elements: the refinance type (rate/term or cash out), the amount of equity you have in the property, any second mortgages, liens or subordinate financing you already have, and your financial report card.
Jumbo (loan amount >$548,250) 10-year fixed rates are typically higher than conforming loans. This process should also include comparing loan estimates, having a 740+ FICO score, 60% (or less) loan-to-value, and the property being your primary residence.
Conforming (loan amount <$548,250) 10-year fixed rates are typically lower than jumbo loans. This process should also include comparing loan estimates, having a 740+ FICO score, 60% (or less) loan-to-value, and the property being your primary residence.