10 Year Morgage: This is a traditional fixed rate loan that is amortized over a period of 10 years (120 Months). Both the interest rate and the monthly payment remain constant through out the life of the loan.
Most lenders offer 10 Year Morgages at an interest rate that is identical to the 15 Year Term. So the main advantage of having a 10 Year Term over a 15 Year Term is that you will save substantially on interest by cutting out 5 years worth of payments. However, the monthly payment of the 10 Year Term is a little higher than that of the 15 Year Term.
Here's a comparison: A $200,000 loan with a 10 Year Term and a 5.25% Rate will have monthly payments of $2,148.83 and will cost $257,500 over the life of the loan. A $200,000 loan with a 15 Year Term and a 5.25% Rate will have monthly payments of $1,608 and will cost $289,396 over the life of the loan. So in this example acquiring a 10 Year Morgage would save you $31,896 over the life of the loan.
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10 Morgage Rate - 10 yr Morgage Interest Rate Info and Loan Application...
