In most cases the 10-year mortgage rates are more favorable than those of longer-term mortgages. Additionally, the shorter ten-year loan term enables you to pay off your mortgage faster, allowing you to build equity in your home more quickly.
How to Get Approved for the Best 10-Year Mortgage Rates in 2024
Research indicates that borrowers who compare options tend to secure more favorable rates compared to those who settle with the first lender they encounter. Typically, lenders offering the most competitive rates reserve them for individuals with good to excellent credit scores.
Should your credit profile fall short of qualifying for the optimal mortgage rate, it’s advisable to scrutinize your credit report and implement any necessary improvements to bolster your creditworthiness. Strengthening your credit profile enhances your chances of qualifying for the lowest interest rates available.
Here’s what you need to know about 10-year mortgages, how they work, and how to find the lowest rate for your situation.
Are 10-year Mortgage Rates lower than other Mortgage Interest Rates?
According to HSH, while interest rates can fluctuate, 10-year mortgage rates typically range from about one-eighth to one-quarter of a percentage point lower than rates on 15-year mortgages.
For instance, considering a $100,000 15-year fixed-rate mortgage at 2.5 percent, the total interest paid over the loan’s lifespan would amount to $20,022. Conversely, opting for a 10-year loan at 2.25 percent could yield savings of $8,257 in interest over the loan term, accompanied by five fewer years of payments. However, it’s important to note that the monthly payment for the 10-year mortgage would be $529 higher.
He highlights the significant advantage of swiftly paying off the mortgage balance, particularly for individuals aiming to clear their mortgage debt by retirement.
As these loans often remain within lender portfolios, there can be considerable variations in rates and fees among different lenders. Therefore, borrowers seeking a 10-year fixed-rate mortgage should consider including local mortgage lenders in their search.
Understanding What Are the 10-Year Mortgage Benefits
A 10-year mortgage represents a home loan structured for repayment over a decade. This option may appeal to individuals seeking swift repayment or considering refinancing. Due to the abbreviated repayment duration contrasting with the more common 30-year mortgages significant savings on interest accrual are attainable, alongside accelerated equity accumulation.
Despite the generally lower interest rates associated with shorter terms, monthly payments on a 10-year mortgage typically surpass those of longer-term options such as 30-year, 15-year, or 20-year mortgages.
A 10-year fixed-rate mortgage is less common than other types of mortgages, but it offers some unique advantages. Although the monthly payments will be high, the interest rates on 10-year home loans are typically lower than those for a 30-year fixed mortgage.
If you can manage the substantial monthly payments, you’ll save a significant amount of money in the long term. This is because you will pay off your home loan in a shorter period, reducing the total interest accrued.
The primary reasons for today’s high mortgage rates are inflation and a series of interest rate hikes by the Federal Reserve aimed at controlling price growth. Although ten mortgage rates have slightly declined in recent months, experts do not expect any significant decreases in the near future.
Are Ten Year Mortgage Rates Declining?
According to Zillow data, as of May 9, 2024, the average interest rate on a 10-year fixed-rate mortgage was 6.13%. This rate was slightly lower than the average rate for 15-year loans and significantly lower than the average rates for 20-year and 30-year loans.
Over the past two years, rates on 10-year mortgages have generally trended upward, despite some short-term dips. Consequently, even current 10-year mortgage rates are considerably higher, making borrowing much more expensive compared to recent years.
As of June 2024, current 10-year mortgage rates remained high, increasing monthly payments for borrowers and making this loan term less appealing compared to when APRs plummeted during the pandemic.
However, if you’re committed to ten-year mortgages for its interest savings and quicker path to being mortgage-free, you can improve your chances of securing the best rates by strengthening your application and comparing offers from multiple lenders.
The average 10-year mortgage rates typically range between 3% and 4%, but they can vary. Here are some of the best 10-year mortgage rates and providers to help you decide. Additionally, compare current mortgage rates if you’re interested in exploring various products and terms.
Before pursuing low interest rates, it’s important to weigh the pros and cons of 10-year mortgages and consider alternative financing options.