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Best 10-year fixed mortgage rates
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10-year fixed mortgage rates: FAQ
What are 10-year fixed mortgage rates?
How much can I save comparing 10-year fixed rates?
Why compare 10-year fixed rates with Ratehub.ca?
Why are fixed rates different from variable rates?
Are 10-year mortgages better than other mortgage terms?
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Guide to 10-year fixed mortgage rates
Jamie David, Sr. Director of Marketing and Mortgages
A 10-year fixed mortgage term is the most risk-averse mortgage selection. If you need to budget long-term or believe interest rates will rise dramatically over the coming years, a 10-year fixed-rate term could make sense. For instance, if you feel certain that, in five years, mortgage rates will be substantially higher than the currently quoted 10-year rate, locking in today's rate could be a sound strategy.
What is a 10-year fixed-rate mortgage?
A 10-year fixed-rate mortgage will have a constant rate of interest over a term of 10 years. The term is not the same as the amortization period, which is the amount of time it takes to pay off your entire mortgage. Rather, your term is the period you are committed to the contractual provisions and mortgage rate of your current lender. With a fixed rate, your monthly mortgage payments will not change, and you'll be protected against interest rate fluctuations.
10-year fixed mortgage rates: Quick facts
- Mortgage rate is fixed over a 10-year term
- Only 0.65% of of all mortgage requests made on Ratehub.ca from January to September 2023 were for 10-year fixed mortgages, compared to 1.8% for the whole of 2022
- According to Mortgage Professionals Canada, 69% of all Canadian mortgage-holders had fixed-rate mortgages at the end of 2022
- 10-year fixed mortgage rates follow 10-year government bond yields
10-year fixed vs. shorter-term mortgage rates
10-year fixed rates are typically higher than rates on shorter terms (like 3 or 5 years). This is because longer fixed-rate terms lock in a lower rate for a longer period of time. While this can be good for you, it transfers the risk of a rate rise to your lender. The higher rate is, therefore, a premium for locking in a lower rate for longer.
These relationships aren't always constant, especially in very low or high rate environments. You should always decide which term is best for you based on the current market and your present circumstances.
10-year fixed rates vs. other mortgage terms (interactive graph)
It's important to remember that it's very difficult to forecast the movement of interest rates over such a long period of time, and there are a number of drawbacks to locking into a mortgage rate for 10 years. The main argument against a 10-year term is the premium you're paying for passing the risk to your mortgage provider.
Another thing to keep in mind is that, after 5 years, the federal Interest Act states that the penalty to break your mortgage cannot exceed 3 months' interest. That means that, after 5 years of your term, you won't need to worry about a massive Interest Rate Differential (IRD) penalty. However, if the mortgage is broken before 5 years, such a penalty could apply.
Historical 10-year fixed mortgage rates
Looking over historical mortgage rates is the best way to understand which mortgage terms attract lower rates. They also make it easier to understand whether rates are currently higher or lower than they have been in the past.
Here are the lowest 10-year fixed rates of the year in Canada for the last several years, compared to several other types of mortgage rates.
Source: Ratehub Historical Rate Chart
The popularity of 10-year fixed mortgage rates
With only 2% of Canadians having mortgage terms over 5 years (known as "longer term mortgages"), long terms are not a popular choice in Canada. Fixed mortgage rates, however, are more common than variable rates. The majority of all mortgages in Canada have fixed rates, with little variation between age groups.
(Source: Mortgage Professionals Canada)
What drives changes in 10-year fixed mortgage rates?
Fixed mortgage rates follow government bond yields, with 10-year fixed rates following 10-year government bond yields. Bond yields are driven by economic conditions. The difference between bond yields and lender-posted mortgage rates vary by a lender's marketing strategy and general credit market conditions.
For more information, check out these helpful pages!
Jamie David, Director of Marketing and Head of Mortgages
Jamie has 15+ years of business and marketing experience. She contributes her mortgage expertise to The Globe and Mail and authors Ratehub’s mortgage and homebuying guides. read full bio