Best 10 Year Fixed Mortgage Rates in Ontario 

We discuss the pros and cons of a 10 year fixed mortgage rate and the risks and opportunities that may be realized over this more extended period.

Quick Overview of 10 Year Fixed Mortgage Rates

• There is a famous quote floating around Ontario that says something to the extent of, ‘In 2021 a very smart borrower locked into a 10 year fixed rate at 2%‘. Indeed when mortgage rates were at their bottom, this strategy would have been an excellent one and serves an important lesson going forward.

• Whether or not 10 year fixed mortgage rates are the correct rate for you today, it should be kept in mind in case there is another significant economic event in the coming years that leads to lower mortgage rates.

• A 10 year term may be given much more attention when there is some evidence that market rates have found their bottom.

• In 2025 mortgage rates have come full swing from their lows in 2021. While for many, this is the wrong time to lock in a 10-year fixed mortgage, for some, this rate will provide peace of mind that rates won’t change for a major part of their mortgage, and for them, this is worth the extra potential interest rate cost. There is no guarantee of what can happen in economics, and there is always a potential for rates to move much higher for much longer.

Current 10 Year Fixed Mortgage Rates Ontario

Frequently Asked Questions

Who should take a 10 year fixed mortgage in 2023?

Borrowers who are looking for long term payment stability and who worry mortgage rates will increase significantly from current levels and/ or will remain higher for much longer than currently forecasted. Otherwise, it’s important for most borrowers to keep this rate in mind for future lock-ins when mortgage rates may be lower.

What are the risks of this mortgage term?

The main risk of 10 year fixed mortgage rates is that interest rates drop. Once locked into a fixed rate mortgage term, it can be extremely expensive to break the mortgage. This is especially so if interest rates have dropped. Other risks include selling the home and breaking the mortgage within 10 years.

How do breakage penalty calculations work on a 10 year fixed?

Generally speaking, to break a 10 year fixed mortgage rate, one of two penalty types will apply. The bank will use whichever penalty amount is higher at the time of breaking:

3 month interest penalty: This can be calculated by multiplying the mortgage rate by the principal amount owing. Then divide this cost by 12 (months). Then once the monthly interest cost is determined, multiply this by 3 to arrive at the 3 month interest penalty.

Interest Rate Differential Penalty or IRD Penalty: If mortgage rates across the market drop, there will be a difference between the 10 year fixed rate and the new lower rates. This difference between the 2 rates is essentially the penalty costs multiplied by the time left in the term. One way to look at this penalty type is by asking the question, ‘how much could I save on interest by breaking this mortgage’? The savings are likely equal to the minimum interest rate differential penalty cost. In other words, the lender has removed any incentive to break the mortgage given lower rates.

However, it’s important to note that by Canadian law, once there are 5 years left in a 10 year fixed term, the penalty is automatically 3 months interest penalty. In other words, the higher IRD penalty may only apply for the first 5 years of the term.

What are some important fine print features to look for in a 10 year fixed mortgage?

Since you could be tied to this mortgage term for a long time, it’s essential to ensure maximum flexibility. Some fine print details to look out for are:

• Pre payment privileges: Are they at least 15% annually? 20% is preferable.
• Portability: Is the mortgage portable to a different home without breaking it or re-starting the term? What are the major limitations of the port? There are usually some limitations that should not limit a home purchase price to less than $1,000,000 or prevent inter-provincial porting.
• Increase and Blend: Whether moving or looking to pull equity out of the property, can you increase the mortgage amount and lower the rate without breaking the mortgage? Will the term need to re-start or can you carry on where you’re at within the term?
• Penalty: What is the specific calculation for the IRD penalty? Some lenders offer more borrower-friendly IRD penalty calculations,