10-Year Mortgage of July 2025
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Fact Checked
Update 03.01.2025
10-Year Adjustable-Rate Mortgage in the US. Apply online

A 10-year mortgage is a type of mortgage with a specific repayment term: 10 years. Also known as a 10-year mortgage, this loan type is a fixed-rate mortgage. Unlike adjustable-rate mortgages (ARMs), your 10-year mortgage interest rate won't change, and you'll have a set amount to pay each month. A 10-year mortgage is a straightforward agreement: You borrow a set amount of money and agree to repay it, with interest, within a decade.

Why get a 10-year mortgage? The main benefit is that you'll pay off your mortgage much faster than with a 15-year or 30-year mortgage. You'll build equity in your home faster, which means you'll save thousands of dollars in interest over the life of the loan. A 10-year mortgage also can provide a sense of security, since you'll have a fixed interest rate to protect you from rising mortgage rates.

Features

  1. Shorter Loan Term. A 10-year mortgage is a shorter loan term than a 15-year or 30-year mortgage. You'll pay off your mortgage faster and build equity in your home sooner.

  2. Fixed Interest Rate. Your 10-year mortgage interest rate is locked in, so you'll have a set amount to pay each month.

  3. Less Interest Paid. Because you'll pay off your mortgage faster, you'll pay less interest over the life of the loan compared to a longer mortgage.

  4. Protection Against Rate Increases. Your fixed interest rate protects you from rising mortgage rates in the future.

  5. Mortgage Insurance. If you put less than 20% down, you'll need mortgage insurance on a conventional loan. FHA loans require mortgage insurance, too. This insurance protects the lender if you fail to make your mortgage payments.

  6. Property Taxes. Your monthly property taxes are typically wrapped into your mortgage payment and set into an escrow account by your lender. Your lender pays the taxes on your behalf and adjusts your escrow account as needed.

Pros and Cons

Pros
  • Faster Debt Repayment. You'll pay off your mortgage debt faster and enjoy more financial freedom sooner.

  • Less Interest Paid. You'll pay less interest over the life of the loan compared to a longer mortgage.

  • More Equity. You'll build equity in your home faster, which can provide a greater sense of financial security and more borrowing power.

Cons
  • Higher Monthly Payments. Your monthly payment will be higher than a 15-year or 30-year mortgage.

  • Limited Mobility. Your higher monthly payment might not leave room in your budget for other expenses or savings, and you'll have less flexibility to cover unexpected expenses or achieve other financial goals.

  • Foreclosure Risk. If you can't make your mortgage payments, you risk foreclosure, which can devastate your credit and financial situation.

How to Get a Mortgage with 10-Year Term

  1. Check Your Credit. Obtain your credit report and check your credit score. Most lenders require a minimum credit score to approve you for a mortgage. You can also calculate your debt-to-income (DTI) ratio by dividing your monthly debt payments by your gross monthly income. Lenders prefer a DTI of 43% or less. You'll also want to work on increasing your credit score.

  2. Save for a Down Payment. Aim to put at least 20% of your home's purchase price down, which will help you avoid private mortgage insurance (PMI). Some lenders offer 10-year mortgages with lower down payment options, but you'll pay more in interest over the life of the loan.

  3. Research Mortgage Lenders. Shop around for mortgage lenders, including banks, credit unions and mortgage brokers. Compare lenders and loan options to find the best fit for your needs and budget.

  4. Apply for a Mortgage. Submit the necessary documentation, such as pay stubs, W-2s and bank statements, to your lender. You'll also need to provide tax returns if your income varies significantly from one year to the next. Once you're approved, you'll receive a loan estimate that outlines the terms of your mortgage.

  5. Close on the Property. Review and sign final loan documents, then wait for funding. You'll need to schedule the closing at the title company, which will coordinate with your lender. Bring a copy of your identification and any additional required documents.

  6. Finalize With Underwriting. Be prepared to provide additional documentation if requested by your lender during underwriting. Your lender will order an appraisal to ensure the property's value matches the loan amount, and a title company will research the property's title to ensure it's clear of issues.

  7. Get Your Mortgage Keys. Review the document carefully, then sign the final loan documents. You'll need to pay your down payment and closing costs, if you haven't already. Once you've signed all documents and paid your down payment and closing costs, the keys to your new home are yours.

Requirements

  1. Credit Score. Most lenders require a minimum credit score of 620 for conventional loans and 580 for FHA loans. A higher credit score can earn you a lower interest rate and better loan terms. You can improve your credit score over time, but a good credit score can save you thousands in interest over the life of a loan.

  2. Debt-to-Income Ratio (DTI). You'll want a DTI ratio of 43% or less, calculated by dividing your monthly debt payments by your gross monthly income. A lower DTI is seen as less risky by lenders.

  3. Income. You'll need to verify your income with pay stubs, W-2s and tax returns. Lenders prefer steady employment and enough income to cover a mortgage payment.

  4. Identification. You'll need to provide identification, such as a driver's license and Social Security number.

  5. Bank Statements. You may be asked to provide bank statements, especially if you have additional income or assets to use for a down payment.

  6. Asset Documentation. If you're using assets, such as savings, for a down payment, you'll need to document their value and ownership.

  7. Property Type. Certain property types, such as manufactured homes or condos, may have additional lending requirements and restrictions.

Conditions

  1. Interest Rate. You can get a fixed-rate mortgage with an interest rate between 3.5% and 4.5% if you have an excellent credit score. Adjustable-rate mortgages (ARMs) often start with even lower interest rates, around 2.5%, for the initial fixed period.

  2. Down Payment. You can put down as little as 3% for a conventional loan, but you'll pay private mortgage insurance (PMI). To avoid PMI, you can opt for a 20% down payment or more.

  3. Closing Cost Funds. You'll need to cover closing costs, which can total 2% to 5% of the home's purchase price. Some lenders offer assistance or allow you to roll closing costs into the loan.

  4. Home Price. You can buy a home that costs $100,000 to $1,000,000 or more, depending on your financial situation and the home's value.

Ways to Get the Money

  1. Certified Check. You'll receive a certified check from your lender or closing agent, which you'll use to pay the seller. This method is old school, but it's a tangible way to make payments.

  2. Escrow Disbursement. Your mortgage funds might be held in escrow and distributed to the proper parties at closing. This ensures all costs and fees are paid before releasing any remaining funds to you.

  3. Direct Deposit. Your lender might offer direct deposit of your mortgage funds into your bank account on closing day. You'll have access to the cash as soon as the funds are deposited.

Best Places to Get a Mortgage with a 10-Year Term

  1. Chase Mortgage. As one of the largest lenders in the country, Chase offers discounted rates and reduced processing fees for existing customers, mainly those with large deposits and investments into their accounts. These relationship loans are perfect for long-time Chase clients, and new deposits might also qualify for lower rates. However, some loan products, like jumbo loans and home equity loans, are not offered in all states. Chase Mortgage is a good choice for current customers who want to add a new mortgage to their relationship or take advantage of low down payment options.

  2. PenFed Credit Union Mortgage. Anyone can join PenFed, but it's especially helpful for VA borrowers since PenFed is a VA lending specialist. The credit union also offers FHA, conventional, and jumbo loans, but the loan menu is limited. Lender fees are reasonable, with a flat origination fee for VA loans. PenFed pulls credit from traditional credit sources, which might not fully represent members' financial situations. Limited loan options and behind-the-times credit reporting make PenFed a good choice primarily for VA loans and minimal-upfront-cost mortgages.

  3. Rocket Mortgage. This online lender offers a wide range of home loan options, including YOURgage, which allows borrowers to choose a 15- or 30-year mortgage, and a low down payment option called One+ By Rocket Mortgage. You can also choose from a variety of loan terms, including 8-, 10-, 15-, and 30-year options. Rocket Mortgage has higher interest rates than many national averages, and it takes an average of 45 days to close on a purchase loan, which is a little longer than some competitors. However, if you want a completely online loan process and more loan flexibility, Rocket Mortgage is a good choice.

Things to Pay Attention To

  1. Interest Rate and APR. Look at the interest rate and the annual percentage rate (APR), which includes fees and other charges.

  2. Mortgage Type. Decide if a fixed-rate mortgage or an adjustable-rate mortgage (ARM) is best for you.

  3. Down Payment. Find out what your minimum down payment options are and how they impact your monthly payment and upfront costs.

  4. Closing Cost Breakdown. Verify the estimated closing costs, which might include appraisal fees, title insurance, and origination fees, and make sure you're not surprised by expenses at closing.

  5. Prepayment Penalties. Determine if your mortgage charges penalties for paying off the loan early and consider how that fits with your plans to keep the home for at least 10 years.

  6. Private Mortgage Insurance (PMI). Find out if you'll need PMI and how it affects your monthly payment. You'll likely pay PMI if you put less than 20% down.

How to Repay a Mortgage with a 10-Year Term?

  1. Know Your Mortgage Details. Review your mortgage details, including the interest rate, loan amount, loan term, and whether it has a prepayment penalty or fees. Note the payment schedule (how often you pay and when) and the due dates.

  2. Make Payments. You can set up automatic payments from your bank or mortgage servicer. This ensures you'll never miss a payment, and you can even take advantage of online payment features your lender might offer. You can also write checks and mail them to the lender's specified address, making sure they're postmarked by the due date.

  3. Make Extra Payments. If you're able, consider making extra payments to your mortgage principal to pay off your loan faster and save on interest. You can also set up bi-weekly payments instead of a monthly payment. This can be made monthly, and it's essentially the same as making a monthly payment and a half.

  4. Stay in Touch with Your Lender. Keep your lender updated on any changes to your income or situation that might impact your ability to make payments. If you lose your job or face another financial setback, such as medical bills, contact your lender to discuss assistance or loan modification options.

Why You Might Be Denied for a Mortgage

  1. Low Credit Score. Late payments, collections, and high credit utilization can damage your credit score and make you a riskier borrower. Recent credit inquiries can also raise red flags, as multiple searches for credit in a short period typically indicate you're not financially stable.

  2. High Debt-to-Income Ratio (DTI). Your DTI ratio is the percentage of your monthly gross income that goes toward paying off debt. Lenders prefer a DTI ratio of 43% or less, and a high ratio can indicate you're over-extended and unable to take on additional debt.

  3. Inadequate Income. Lenders need to see consistent income to ensure you can afford your mortgage payment. Incomplete or inconsistent income documentation can lead to denial, as can a short or unstable employment history.

  4. Inadequate Down Payment. Your lender may require a minimum down payment, usually around 20% of the home's purchase price. A smaller down payment increases your loan-to-value (LTV) ratio, which heightens risk for the lender and can lead to denial.

  5. Poor Property Appraisal. If the property appraises for less than the purchase price or loan amount, the lender might deny the mortgage due to concerns about the property's value.

  6. Risky Financial Recent Past. Recent bankruptcies, foreclosures, and other red flags in your credit history can raise concerns for lenders and lead to mortgage denial. Outstanding collections accounts, tax liens, and other judgments can also hinder your mortgage chances.

Editorial Opinion

A 10-year mortgage is a great option if you want to pay off your mortgage debt quickly and enjoy a fixed interest rate. You'll build equity faster and save on interest over the life of the loan. However, it's crucial to carefully consider your financial situation and ensure you can afford the higher monthly payments that come with a 10-year mortgage.

Important

Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

How to Choose a Mortage Lender

  1. Check Associations. Look for lenders who are members of reputable organizations, such as the Mortgage Bankers Association (MBA). Membership in these organizations can indicate a higher level of reliability and professionalism.

  2. Review Terms and Conditions. Carefully examine all the terms and conditions of the mortgage contract. Pay special attention to details like the loan term, fixed vs. variable interest rates, and any prepayment penalties.

  3. Interest Rates and Costs. Scrutinize the interest rates and ensure that your contract includes a detailed breakdown of the total cost of the mortgage, including closing costs, origination fees, and any other charges.

  4. Right of Rescission. Remember you can utilize your right of rescission, which typically allows you to cancel the mortgage within three days after signing the agreement. Additionally, use the "cooling-off" period to thoroughly review the contract and make an informed decision before finalizing the mortgage agreement.

  5. Compare Offers. Shop around and compare offers from multiple lenders to find the best rates and terms that suit your financial situation.

Additional resources

To learn more about mortgages and best practices, check out some of the following resources:

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13.02.2023
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Update 03.01.2025

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