10 year fixed rate mortgages are undoubtedly the most cost effective way to finance your home or any large purchase. Interest rates are lower, and you pay much less interest over time. On the other hand, your monthly repayments are generally much higher, so you will need to make sure that you have guaranteed cash flow to cover the extra payments for the duration of the loan, or you may need to refinance your home.

If you have the cash flow to support the extra payments, then 10 year fixed rate mortgages make the most financial sense. To give you an idea of the difference, on a typical 10 year mortgage of $200,000 you’ll be paying around $2,000 a month, or a total of $240,000 over the life of the loan. However, the same loan taken over 20 years will only cost you $1,265 a month, but since you’ll be paying a higher interest rate for longer the loan will cost you a total of $303,600 – that’s a huge saving!

You will find a lot of variation in 10 year fixed rate mortgage interest rates, but if you use a good mortgage comparison website and do some clever shopping around you could be able to get a rate that is under 4%. Provided you have never had adverse credit and you earn enough money to pay for the loan repayments, you could have the home of your dreams and be free and clear in only 10 years!

Of course, if your situation changes that doesn’t mean you’ll have to sell your home. If you suddenly find yourself facing a decrease in income, you can always refinance your home with a 15, 20 or even 30 year option to reduce your monthly payments and free up some capital.