Fewer than 1-in-50 borrowers get 10-year fixed mortgages, according to the Bank of Canada. And there’s a reason for that.
But that’s changed. At today’s rates, the gap between competitive conventional 10-year and five-year rates is a skimpy 30 basis points. That would require rates to be as little as 75 basis points higher in 2024 for a 10-year fixed to beat a five-year fixed. One way a 10-year fixed can bite you is if you break the mortgage too early. Once you make it to the five-year mark in any fixed mortgage, it’s no big deal. The maximum penalty allowed by law is just three month’s of interest in that case. But if you break a 10-year termFor that reason, if there’s a chance you’ll pay out your mortgage in the first 60 months, don’t even ponder a 10-year.
It’s essentially an insurance policy. And some people are more than happy to pay for predictability. “We call it the sleep well at night mortgage," Mr. Gollom says.Indeed, for those highly risk-averse folks who don’t want to think about their financing until 2029, now is arguably the least bad time in history to consider a decade-long mortgage.
globemoney Wow. This is the first time I'm seeing such a low rate for 10year fixed term. I haven't even seen 10year terms, most I've seen is 7. HSBC on the hunt for mortgage marketshare in Canada