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10-Year Mortgage Rates: Compare Today’s Rates

Andrew Dehan5-minute read

June 16, 2021

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If you’ve ever wanted to get a mortgage and try to pay it off quickly, a 10-year mortgage may be just right for you. While most mortgages have a 30-year or 15-year term, a 10-year mortgage means you pay off your loan in 10 years, paying much less interest over the course of the loan.

Typically, 10-year mortgage rates are lower than other fixed-rate mortgages, meaning you’ll be charged less interest. So how do you get a 10-year mortgage and is it right for you? Read on to find out.

Can You Get A 10-Year Mortgage?

Most major mortgage lenders offer a 10-year mortgage, including Rocket Mortgage®. In fact, one of our products, YOURgage®, lets you choose any loan term between 8 and 29 years.

Let’s break down what exactly we’re talking about when we say “10-year mortgage.” These are fixed-rate mortgages, meaning you will lock in your interest rate at the beginning of the 10-year term and pay the same rate over the course of the loan.

These mortgages differ from what you may see in an adjustable-rate mortgage (ARM). A 10/1 or 10/6 are two common ARMs where you have a low introductory mortgage rate for the first 10 years, then a rate that adjusts every year or 6 months, depending on the loan.

Most of the time, these ARMs aren’t what people are referring to when they say “10-year mortgage” because you’re still paying the mortgage over 30 years.

10-Year Mortgage Refinance

A 10-year mortgage can be a great option for a homeowner wanting to pay off their loan sooner. Refinancing to a 10-year mortgage can get you a lower interest rate and put you on track to fully owning your home.

It’s a good time to refinance when mortgage rates are lower, your credit and home value have increased, and you want to switch from an ARM to a fixed rate. Refinancing to a 10-year can cut the amount of interest you’ll pay, but it will also increase your monthly payment.

10-Year Mortgage Rates: Compare Today’s Rates

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Who Qualifies For A 10-Year Mortgage?

A 10-year fixed rate mortgage is a good option if you can make a sizable down payment and have enough income to cover the monthly payment.

While you may have the funds and the credit to qualify, you need to realize that a 10-year fixed-rate mortgage has substantially higher monthly payments than a 30-year. That’s because you’re paying off the mortgage three times faster.

If you’re concerned a 10-year mortgage may make you house-poor, but still want to pay off your mortgage quickly, consider a 15-year loan.

What Is A Good 10-Year Mortgage Rate?

There isn’t much historical data on 10-year mortgages due to it not being a very popular option. However, there is historical 15-year fixed-rate mortgage data, which can get you close to the idea of what to expect for a 10-year fixed.

When Freddie Mac introduced the 15-year fixed-rate mortgage in September 1991, the average rate was 8.69%. It wasn’t until the early 2010s that average 15-year rates dipped below 4%.

Since 2016, they’ve ranged from a year average of 4% in 2018 to a low of 2.61% in 2020. In fact, they saw their historic lowest at the end of 2020/start of 2021, with rates averaging around 2.1% between December and January.

You can expect average 10-year mortgage rates to be at or lower than the rates of the average 15-year.

Current 10-Year Mortgage Rates

Currently, market rates remain very low. In fact, 2020 had the lowest mortgage rates of any year on record. While there has been a small uptick in rates in 2021, expect rates to remain low throughout the year.

Once again, there is not a lot of data on the national average for 10-year mortgages, but 15-year conventional mortgages have been below 2.5% on average for 2021 and could remain low for the year. If you’re thinking of refinancing, now is an incredible time.

10-Year Mortgage Rates: How To Calculate Your Cost

Let’s run through an example to show you the differences between a 10-year mortgage and a 30-year mortgage. Note, for this example, we’re not including closing costs, home insurance or property taxes. We’re just breaking down the payments based on the interest and loan amount.

10-Year Mortgage Info:

  • Home price: $250,000
  • Down payment: $50,000
  • Amount borrowed: $200,000
  • Interest: 2.0%
  • Monthly principal/interest payment: $1,840.27
  • Total interest paid over term: $20,832.29

30-Year Mortgage Info

  • Home price: $250,000
  • Down payment: $50,000
  • Amount borrowed: $200,000
  • Interest: 2.875%
  • Monthly principal/interest payment: $829.78
  • Total interest paid over term: $98,722.58

As you can see, with the same loan amount and accounting for an average interest rate for each loan, there are some big differences between a 10-year and a 30-year fixed-rate mortgage.

First off, with a 10-year, your monthly payments are more than double what a 30-year would be. The reason they’re not triple lies in the interest. The 10-year has a lower interest rate and is paid over a term that’s much shorter.

That’s where we come to the second big difference. The 30-year mortgage pays nearly $78,000 more in interest over the life of the loan. While the monthly payment is much lower, a greater percentage of the payment is in interest. Even if you got a 15-year fixed rate mortgage at 2.25%, you would still pay $15,000 more in interest over the course of the loan.

Alternatives To 10-Year Mortgages

There are many loan options out there besides a 10-year conventional fixed-rate mortgage. For example, FHA Loans are great options for home buyers with a lower credit score that come with a choice between 15- and 30-year fixed-rate terms, as well as adjustable-rate mortgages.

On the other hand, if you’re interested in buying a more expensive property, and have the credit score and cash reserves to do so, a jumbo loan may be the option for you. Jumbo loans come in a variety of terms and repayment schedules, and they can be fixed- or adjustable-rate loans.

Ultimately, the best alternative to a 10-year fixed-rate mortgage may be a 15-year fixed-rate mortgage. It splits the difference between a 30- and a 10-year mortgage, with a more manageable monthly payment and significant savings on interest. If you are happy with your current interest rate and your lender does not have any prepayment penalties, you could also pay more than your regular monthly payment and request that your lender apply that extra money toward principal reduction.

Another popular option is to take out a 30-year mortgage and put the extra money you would use on your payment into an investment account. This could be risky, depending on the details of your portfolio. But it could make you much more money than the difference in interest paid between a 10-year and 30-year mortgage.

Get approved to refinance.

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The Bottom Line

A 10-year fixed-rate mortgage is a great option for those who want to pay off their mortgage quickly and have the funds to do so. Note that 10-year fixed-rate mortgages shouldn’t be confused with 10/1 or 10/6 ARMs, which are 30-year mortgages that have an introductory interest rate period of 10 years.

If you can afford to make a large down payment and a high monthly payment, a 10-year fixed-rate mortgage can save you big-time on interest when compared to a 30-year mortgage. The greater the amount the mortgage is, the more you can save in interest.

Of course, a high monthly payment is not doable for many people. It’s important to remember you have options. You can always refinance to a 10-year mortgage at a later date when you have the income to support a higher payment.

Want to learn how to be prepared for applying for a mortgage? Read our article on how to get the best mortgage rate.

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Andrew Dehan

Andrew Dehan is a professional writer who writes about real estate and homeownership. He is also a published poet, musician and nature-lover. He lives in metro Detroit with his wife, daughter and dogs.