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Baby Boomers Preferring 10-Year Mortgages
Monday, June 17, 2013 6:25 AM

The refinancing boom may be cooling down, but the move to shorter mortgages, especially 10-year loans among pre-retirees, appears to be accelerating.

Some community banks say 10-year mortgages, once an insignificant niche option, are now accounting for increasingly large chunks of their business.

Also, in a survey released last week, Freddie Mac, the giant federal mortgage investor, found that 28 percent of all refinancings in the first quarter of 2013 involved shortening of terms. Among refinancers with 30-year mortgages, nearly one-third switched to shorter-term replacement loans.

Though 15-year mortgages have been popular for years among homeowners who want to pay off their balances quickly, lenders say the 10-year loan, targeted directly at the demographic tsunami of baby boomers who are still employed but planning to retire in the coming decade, is on the upswing.

According to, which surveys 7,000 lenders nationwide on rates and terms, the average 10-year fixed-rate mortgage goes for 3 percent with a fifth of a point.

But many lenders quote much lower than that, some for a s low as 2.375 percent with no points. For community lending institutions, 10-year loans tend to be portfolio investments. Rather than selling the mortgages to Freddie Mac, Fannie Mae or other investors, lenders retain them in-house. As a result, rates can be lower.

(Source: The Washington Post, 16 June 2013)