About 10-Year Fixed Mortgages
The 10-year fixed is the longest Canadian residential mortgage term and the most defensive choice on the rate curve. You pay a premium versus the 5-year (typically 0.50–1.20%) for ten years of locked-in pricing.
The math becomes interesting after year 5. Under Section 10 of the Canadian Interest Act, any mortgage with a term over 5 years is treated, after the 5-year mark, as breakable for only 3 months' interest. This means in years 6–10 you have variable-rate-style flexibility with the certainty of a fixed payment — the best of both worlds, at the cost of a higher headline rate.
This term suits borrowers with a strong reason to fix payments long-term: a fixed-income retiree, a buyer in a market they're confident will appreciate, or someone who simply doesn't want to think about renewal until well into the next decade.
Pros
- Decade-long payment certainty
- Years 6–10: penalty capped at 3 months' interest
- Strong defensive choice in a rising-rate environment
Cons
- Highest fixed rate offered
- First 5 years carry full IRD penalty
- Locked in if rates fall significantly during years 1–5
Who it suits: Risk-averse households, retirees, and buyers in stable life situations who don't want to renegotiate again until the 2030s.