A recent article in the Hartford Courant reports that both locally and nationally, banks are experiencing an increased demand for 10-year mortgages. These mortgages are especially appealing to baby boomers who want to pay off their mortgage before they retire. 10-year mortgages offer several benefits, including:
- very low interest rates,
- allowing borrowers to build equity quickly, and
- significantly reducing the amount paid in interest.
Clark Howard notes that with 10-year mortgage rates as low as 2.375%, one can borrow at roughly the rate of inflation, which means the person is basically borrowing for free.
However, a 10-year mortgage is not for everyone; the monthly payments are relatively large and that can mean trouble if the borrower’s financial situation is unstable.
