10-year mortgage rates for August 2022

Most people have heard of it 30 years And 15-year mortgages, but have you heard of a 10-year mortgage? This little-known type of mortgage could save you a lot of interest if you can afford a hefty monthly payment.

A 10-year mortgage is less common than other types of mortgages, but it has its own unique advantages. Even though your monthly payments will be higher than on other types of mortgages, you could save a significant amount of interest over the course of your home loan.

Furthermore, 10-year mortgage rates are still relatively low compared to mortgage rates in general, which means they offer valuable financial benefits in the current economic climate.

Here’s everything you need to know about what a 10-year mortgage is, how it works and how to find the lowest mortgage mortgage rates possible.

What is a 10-year mortgage?

Ten-year mortgages work in exactly the same way as other types of mortgages, but instead of repaying the mortgage in 15 or 30 years, you’ll pay it back in 10. This can make sense. when buying a home if you can afford a larger monthly payment, you want to save a lot on interest payments and don’t want to pay off your mortgage for several decades. You apply and qualify for a 10-year mortgage in the same way as other types of mortgages.

While 10-year mortgages aren’t that popular, the home buying process it won’t change if you have a 10 or 30 year mortgage. You should expect to pay all the same fees, including closing costs and origin taxes.

It is important to speak to multiple lenders and do your research before choosing one. Interviewing more than one lender will help you find the lowest rate and fees for your personal financial situation. The more lenders gather information, the better your chances of securing a lower rate.

Trend in 10-year fixed-rate mortgage rates

Currently, rates for a 10-year mortgage are at least below 5%, while 30-year mortgage rates are in the low to mid-range of 5%. Since the beginning of this year, mortgage rates have slowly risen by around 3%. While it’s unclear where rates will land in the rest of the year – if inflation continues to rise, mortgage rates could rise – locking a 10-year mortgage rate while hovering below 5% could save you tens of thousands. of interest. Even one or two percentage points can make a significant difference in the interest you pay on your mortgage.

Current mortgage and refinancing rates

We use the information collected by Bankrate, which is owned by the same parent company as CNET, to monitor the daily trend of mortgage rates. The table above summarizes the average rates offered by lenders across the country.

The benefits of a 10-year mortgage

  • Lower interest rate: You will pay a lower interest rate for a 10-year mortgage than other types of mortgages because the bank takes less risk by lending you the money in a shorter period of time. Also, reduce the total interest you will pay overall.
  • Pay off your loan faster: You could save tens of thousands of dollars over the life of your loan by paying it years faster than other types of mortgages, allowing you to build equity in your home faster.

Cons of a 10-year mortgage

  • High monthly payments: If you can’t afford high monthly payments, a 10-year mortgage is probably not for you.

Frequent questions

What is the difference between a 15 and 10 year mortgage?

With a 10-year loan, you will receive a slightly lower interest rate and therefore pay less interest over time. This means that the monthly mortgage payment will be higher, even if the overall loan will be cheaper in the long term. You will also pay off the loan in 10 years, instead of 15.

What is the difference between a 10 and 30 year mortgage?

It will take a third of the time to pay off a 10-year mortgage compared to a 30-year mortgage, saving you tens of thousands of dollars in interest over the years. You will also pay a lower interest rate than a 30-year loan. Expect a higher monthly payment, even if you will save overall anyway.

How do you get access to a 10-year fixed rate mortgage?

Qualifying for a 10-year mortgage is the same as qualifying for other types of mortgage, but your income and credit score requirements will be stricter to ensure you can afford to make higher monthly payments.

Make sure you have all your financial documents such as tax returns and payslips in order because the lender will take almost every aspect of your financial life into account to determine whether or not you can repay the loan. Things like your income, your credit score, the amount of debt you’re carrying, and your loan-to-value ratio all affect the rate a lender will offer you.

Other Mortgage Tools and Resources

you can use CNET’s mortgage calculator to help you determine how much home you can afford. CNET’s mortgage calculator takes into account things like monthly income, expenses, and debt payments to give you an idea of ​​what you can manage financially. Your mortgage rate it will depend in part on those income factors, as well as your credit score and zip code where you are looking to buy a home.

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