Connecting you to Canada's best mortgage rates

10-Year Fixed Mortgage Rates

Mortgage Rate Mortgage rate The rate of interest you will pay on the outstanding balance of your mortgage. This rate can be fixed for the duration of the term or variable, fluctuating with the prime rate. Fixed rates are most popular in Canada and represent 66% of all mortgages.	Provider Provider Mortgage providers include lenders and mortgage brokers. As the name suggests, lenders provide the funding for your mortgage. Mortgage brokers are licensed professionals with access to multiple lenders and products. According to the Canadian Mortgage and Housing Corporation, mortgage brokers accounted for 38% of mortgage originations in 2009.	Rate Hold Rate hold The rate hold is the time period, between 30-120 days, before your mortgage renewal date you are able to lock in the current mortgage rate. If rates go down further within this period, however, many lenders will honour the lower rate.	Pre-Payment Prepayment Prepayment options outline the flexibility you have to increase your monthly mortgage payments or make a lump sum outlay against your mortgage as a whole. According to the Canadian Association of Accredited Mortgage Professionals (CAAMP), 28% of mortgage holders used one or both prepayment privileges in 2010.	Payment Payment The monthly mortgage payment is calculated based on the mortgage amount, amortization period and the associated mortgage rate. A general affordability rule is that your monthly housing costs should not exceed 32% of your gross household monthly income.
3.99%	Marc Crossman	30 days	Lump Sum: 10% Monthly: 100%	$- Get Details
3.99%	ING Direct	120 days	Lump Sum: 25% Monthly: 25%	$- Get Details
4.19%	PC Financial	120 days	Lump Sum: 20% Monthly: 25%	$- Get Details
4.34%	True North Mortgage	120 days	Lump Sum: 25% Monthly: 25%	$- Get Details
5.19%	FirstLine Mortgages	75 days	Lump Sum: 20% Monthly: 20%	$- Get Details
5.40%	CIBC	90 days	Lump Sum: 10% Monthly: 15%	$- Get Details
5.45%	RBC Royal Bank	90 days	Lump Sum: 10% Monthly: 100%	$- Get Details
6.29%	Scotiabank	90 days	Lump Sum: 15% Monthly: 15%	$- Get Details
6.75%	National Bank	90 days	Lump Sum: 10% Monthly: 100%	$- Get Details
6.75%	Laurentian	90 days	Lump Sum: 15% Monthly: 15%	$- Get Details
6.75%	TD Bank	30 days	Lump Sum: 15% Monthly: 100%	$- Get Details
6.75%	Bank of Montreal	90 days	Lump Sum: 20% Monthly: 20%	$- Get Details
6.75%	MCAP	30 days	Lump Sum: 15% Monthly: 15%	$- Get Details

10-year Fixed Mortgage Rates

Historical 10-Year Fixed Mortgage Rates

Mortgage rate is fixed over a 10-year term
7% of Canadians have a mortgage term between 6-10 years
66% of Canadians have fixed mortgage rates
10-year fixed mortgage rates follow 10-year government bond yields

10-year fixed mortgage rate defined

A 10-year fixed mortgage will have a constant rate of interest over a term of 10 years. The term is not the same as the amortization period – the amount of time it takes to pay off your mortgage – but, rather, is the period you are committed to the contractual provisions and mortgage rate with your lender. Your monthly mortgage payments will be fixed, and you are protected against interest rate fluctuations.

Comparing 10-year fixed mortgage rates

A 10-year fixed mortgage 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, it may make sense. For instance, if you feel certain in five years mortgage rates will be higher than the current quoted 10-year rate, locking in for the long-term is a sound strategy. Your monthly mortgage payments will remain constant over a period of 10 years, and you are protected against interest rate fluctuations.

Historical 10-Year vs. Short Term Mortgage Rates

However, it is very difficult to forecast the direction interest rates will take over such a long period of time, and there are a number of drawbacks to locking in to a mortgage rate for 10 years. The foremost argument against a 10-year term is the premium you will pay for passing on the risk of interest rate fluctuations for 10 years. You should note that your lender takes on more risk the longer the term, and premiums tend to grow exponentially. It is rarely worth paying this premium. Furthermore, the penalty costs associated with breaking a mortgage with a term of 10 years would be very high.

Popularity of 10-year fixed mortgage rates

7% of Canadians have a 6-10 year term

Term Length	Age group
Term Length	18-34	35-54	55+	All ages
1 year term	5%	7%	6%	6%
2-4 year term	27%	18%	12%	20%
5 year term	66%	65%	69%	66%
6-10 year term	3%	9%	10%	7%
>10 year term	0	0	2%	1%

Source: CAAMP "Annual state of the Residential Mortgage Market in Canada" 2010

With only 7% of Canadians having mortgage terms between six and 10 years, long terms are not a popular choice in Canada. They are even less popular amongst younger age groups at only 3% uptake in ages 18-34.

Fixed mortgage rates, however, are most common, at 66% of all mortgages in Canada with little variation amongst age groups.

What drives changes in 10-year fixed mortgage rates?

Fixed mortgage rates follow government bond yields, with the 10-year fixed rate following 10-year government yields. The spread between bond yields and lenders’ posted mortgage rates vary based on independent marketing strategy and general market credit conditions.

Source: All data percentages were taken from CAAMP "Annual State of the Residential Mortgage Market in Canada" 2010

Mortgage Amount: Mortgage Amount If you are a first-time homebuyer, the mortgage amount is the price of the home you intend to purchase, minus your down payment. If you are renewing or refinancing your mortgage, this is the value of your the mortgage.	Type:		Term: Term The mortgage term is the amount of time a home buyer commits to the rules, conditions and interest rate agreed upon with the lender. The term can be anywhere from six months to 10 years, with a 5-year mortgage term being the most common duration.
	Province:		Amortization: Amortization The amortization period is the length of time it takes to pay off your mortgage in its entirety. The most common amortization period is 25 years, with the maximum set at 30 years for down payments less than 20%. Although longer amortization periods reduce your monthly payments, you will pay more interest over the life of your mortgage.