Compare Current 10-Year Fixed Mortgage Rates
The difference between a 30-year fixed-rate and a 10-year fixed-rate mortgage is pretty astounding. While a 30-year rate offers a high 3.400% interest rate and 3.620% APR, a 15-year fixed-rate boasts a much lower 2.860% interest rate with a 3.130% APR. Now imagine what a 10-year mortgage could save you.
Using our exclusive SimpleScore methodology, we have researched and analyzed today’s leading 10-year mortgage lenders to compare the best 10-year mortgages of 2020.
Compare current 10-year mortgage rates
According to Bankrate’s latest survey of the nation’s largest mortgage lenders, these are the current refinance average rates for a 30-year, 15-year fixed and 5/1 adjustable-rate mortgage (ARM) refinance rates among others.
|30-Year Fixed Rate||3.040%||3.380%|
|30-Year FHA Rate||3.250%||3.750%|
|30-Year VA Rate||2.920%||3.100%|
|30-Year Jumbo Rate||3.130%||3.240%|
|20-Year Fixed Rate||2.980%||3.270%|
|15-Year Fixed Rate||2.570%||2.890%|
|15-Year Fixed Jumbo Rate||2.600%||2.660%|
|5/1 ARM Rate||3.060%||4.060%|
|7/1 ARM Rate||2.960%||3.960%|
|7/1 ARM Jumbo Rate||2.910%||3.930%|
|10/1 ARM Rate||3.050%||3.910%|
Rates data as of 10/20/2020
Best 10-year mortgages of 2020
- Best Online Lender: Rocket Mortgage
- Best for Low Rates: Third Federal Savings & Loan
- Best for Low Upfront Costs: First Mortgage Direct
- Best for Member Perks: SoFi
Best 10-year mortgages at a glance
|Lender||Interest Rate (APR)||Min. Down Payment||Min. Credit Score|
|Rocket Mortgage||2.5% (3.174%)||FHA loans: 3.5%|
Other loans: 10%
|FHA loans: 560 |
Other loans: 500
|Third Federal Savings & Loan||2.39% (2.59%)||3%||Unpublished|
|First Mortgage Direct||Varies||10%||FHA/VA loans: 580 |
Other loans: 620
*Rates accurate as of July 2020
What is a 10-year mortgage?
When you buy a new home, you are going to need financing to help you pay for it. You will quickly find that there are many types of home loans that you can use. A 10-year mortgage is one option to reduce the length of your loan while still benefiting from a fixed interest rate. A fixed-rate mortgage means that the interest rate will not change for the length of your loan, so you will have the same payment amount each month. Although the amount of your taxes and insurance may change, your interest rate will not be affected.
There are different types of government-sponsored mortgage programs specialized to assist homebuyers in the purchasing process. Because not everyone who wants to buy a house can afford a 20% down payment or private mortgage insurance, these mortgage programs are available for borrowers:
- VA loans are designed to help military members and veterans, as well as their families.
- USDA loans provide help to those buying within certain rural or suburban areas.
- FHA loans help borrowers with low credit scores.
How 10-year mortgages work
A fixed-rate mortgage benefits from the same rate even if markets fluctuate. That means that for the entire span of a decade, your mortgage payment will stay the same, and it will not be affected by any volatility in housing and financial markets. Not only will your rate not change, but your entire mortgage loan will last a set term of ten years. A fixed-rate offers far more stability and security for borrowers than a variable-rate APR, which is subject to constant change and could mean a different payment every month. If you are someone who takes comfort in knowing exactly what you have to pay every month, a fixed-rate 10-year mortgage is likely the best fit for you.
Historical 10-year mortgage rates
2020 was headed for a positive year before COVID-19 swept across the country, causing the federal government to slash interest rates in response. While interest rates are lower than they were last year or even at the beginning of this year, markets have seen some improvement as summer slowly returns to town.
“Mortgage interest rates are closely correlated with the 10-year Treasury yield, which has stayed below 1% for much of the last month,” Bill Banfield of Rocket Mortgage tells Realtor.com.
However, with some experts predicting a second wave of coronavirus by fall 2020, the U.S. economy could be severely impacted again, and it could stall any burgeoning growth within the markets. This could mean even more attractive interest rates for borrowers throughout the rest of the year until the economy is able to recover from COVID-19 once more.
When to refinance a 10-year mortgage
There are many benefits to a 10-year mortgage that can make it the right choice for you. Low interest rates are what initially capture the attention and for good reason – it’s a tempting prospect to be mortgage-free in 10 years rather than thirty.
However, it is not always so easy to qualify, since banks tend to request higher credit scores. You will also face a much larger monthly payment since you are paying off your loan in a fraction of the time of other loans. One ideal scenario of when to refinance a 10-year mortgage is when you have just a small balance left on your mortgage, and you want to refinance. The lower loan amount is far more manageable to handle in a truncated timeframe, and you can also benefit from any lower interest rates that may be available.
30-year vs. 10-year mortgage
When you are shopping for a mortgage, you will likely find yourself debating the merits of a 30-year mortgage versus a 10-year mortgage. Just like any loan, you will find pros and cons of both.
A 30-year mortgage may be tempting at first because of the lower monthly payments, but you will also be committed to paying quite a bit of interest for a very long time. On the other hand, a 10-year mortgage carries higher monthly payments to make up for the shorter timeframe, and you won’t enjoy the same flexibility with your payments that you would with a longer loan.
Pros and cons of a 10-year mortgage
How to choose the best 10-year mortgage for you
- Determine what you can afford. Use a financial calculator to determine how much you can afford. Pull your credit report to see where you stand. The better your credit score, the more likely that you will be approved.
- Do your research. Confirm that a 10-year loan is a better fit for you than other types of mortgages. A 30-year mortgage may feel like a long time, but the lower payments could be more affordable for your budget.
- Choose your loan type. Your long-term plans for your home will ultimately help you determine which kind of loan is right for you. If you intend to live in your home for a long time, a 30-year loan may be the right fit, but if there is merely a stopping point on the way to another home in the future, you will likely want to explore a much shorter loan term, such as a 10-year loan.
- Consider special options for your loan. There are other kinds of loans that are available to certain borrowers who meet specific criteria. These loans can offer significant savings or support that you otherwise may not find among more mainstream options, such as these.
- Shop lenders. No two lenders are the same, so it is important to fully shop your options to find the lender that works best for your needs. Many lenders allow you to check rates without impacting your credit score, but be careful to check before you end up in multiple marks on your credit report.
[Related: How to Get a Preapproved Mortgage]
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