Compare 10-Year Fixed Mortgage Rates
Homeowners who aren't willing to take on the risk of ever-changing mortgage rates can consider a 10-year fixed mortgage. This type of mortgage guarantees their rate for the maximum amount of time that Canadian lenders allow and ensure that their payments won't change over the course of those 10 years.
10-year interest rates are often a little bit higher than 1-year or 5-year but for many borrowers, by locking in a rate for 10 years, they are protected against the risk of rising interest rates that can eventually lead to higher monthly mortgage payments.
Mortgage Stats in Canada
- As of 2023, 75% of Canadian mortgages are fixed-rate
- Most Canadians hold mortgages with amortization periods over 25 years
- As of Nov 2022, 0.15% of mortgages in Canada were in arrears
- 66.5% of Canadians own their own homes in 2021
- The prime rate in Canada as of Feb 2023 is 6.70%%
Bank of Canada
What Drives Changes in 10-Year Fixed Mortgage Rates?
In Canada, lenders secure fixed mortgages with Government of Canada bonds and as such, the yields from these bonds are the biggest factor in determining fixed mortgage rates. Bond yields are primarily affected by economic growth and inflation across the country.
Pros Of a 10-Year Fixed Mortgage
- Monthly or bi-weekly mortgage payments remain the same for 10 years
- At the end of the term, homeowners can change providers without penalty if they're unhappy
Downsides of a 10-Year Fixed Mortgage
- If interest rates drop homeowners can't take advantage of lowering their payments
- Homeowners who want to make changes before the term expires face financial penalties
How Much Can You Save Comparing 10-Year Fixed Rates
10-year fixed mortgage rates vary by several points depending on the lender and that's why it's so important to take time to compare rates and shop around. Working with a mortgage broker is often the best way to do this, as brokers have access to a variety of rates from different lenders across the country. By finding a lender with a lower rate, you may be able to save thousands of dollars on the purchase of your home.
10-Year Fixed Mortgage Rates vs. Shorter-Term Mortgage Rates
If you're uncertain about what lies ahead in terms of interest rates or if you prefer to know what to expect when it comes to budgeting your funds, a 10-year fixed mortgage rate may be the better choice for you. 10-year mortgages are the longest term allowed in Canada and the best way to ensure your payments remain the same for a long period of time. While a 10-year mortgage is a great way to ensure your payments remain the same, it's important to keep in mind that penalties are typically charged for breaking the term by changing mortgage types or lenders early.
The Difference Between Fixed and Variable Rate Mortgages
The biggest difference between a fixed-rate mortgage and a variable-rate mortgage is the monthly payment you'll make on your mortgage. While a fixed-rate mortgage means that your interest and monthly or bi-weekly mortgage payments stay the same for the duration of your mortgage term, variable-rate mortgages change over time. Payments may change every few months to reflect current Bank of Canada interest rates. With a variable rate mortgage, interest rates are lower than fixed mortgage rates; however, in the event that rates increase drastically due to changes in the economy, homeowners may find themselves eventually paying more than they would have if they'd locked in their rate on a fixed term.
What is a Rate Hold?
Rate holds can be applied to variable or adjustable-rate mortgages for a short period of time. Using rate holds, homeowners can lock-in their mortgage rate temporarily to avoid an increase in their mortgage payments. Typically, rate holds can be applied for a period of 30 to 60 days; however, some lenders may allow rate holds of up to 120 days.
Why Compare 10-Year Fixed Mortgage Rates with My Rate Compass?
My Rate Compass is an impartial, unbiased hub of information with current, up-to-date mortgage rates from brokers and major banks across Canada. To find reliable information about mortgages, including accurate posted rates, use My Rate Compass to research your options before selecting a mortgage lender.