Are 10 year Mortgage terms worth looking at?

Recently I have seen discussion on mortgage broker websites on the advantages of 10 year mortgages. This has not been a popular option over the years. I know that i have only done one 10 year mortgage deal in 7 years in the business.
Checking with CAAMP , the Canadian Association of Accredited Mortgage Professionals it turns out that nation-wide, only 1% of people go for this option.
What's changed? Well the 10 year rate has dropped below 4% and now sits at 3.89%. This used to considered a good 3 year rate a couple of years ago! What are the advantages of taking a longer term like 10 years? We know that rates are at historically low rates now. The only way for rates to go now is up. I recall getting my best clients into mortgages 2 years ago at 4.39%. This is now the interest rate some private mortgages are charging for people with bad credit.
We know that rates will go back up to 5-6% sometime in the next 2-3 years and stay there for a while. The advantage with taking a 10 year term at 3.89% is that you avoid all the rate hikes for the next 10 years. You get a really great rate under 4% which will beat rates over the next decade to be sure.
What are the disadvantages?
10 years is a long term. What if you want to get out of the mortgage or move? First - if you move, most lenders will let you port the mortgage. In addition, you can increase and blend the mortgage to account for any additional costs in the new home. The penalty is the tricky part. On a traditional mortgage you are charged 3 months interest or IRD, which stands for Interest Rate Differential. This is a tricky calculation that is in effect, pay us the interest you were going to pay us over the balance of the term. This can amount to $20,000 or more in penalties. This has prevented many people from renewing early over the past 18 months.
The new 10 year mortgages come with this feature; after 5 years you can break the mortgage with a simple 3 month penalty which figures out to about 1% of your mortgage. In a $200,000 mortgage this would be $2000. The savings will often pay off the penalty in a very short time.
So, is a 10 year mortgage good for you? It all depends on your situation and where you are in life.. It's best to talk to a mortgage professional like myself to see if this is a good option for you. Contact me today to discuss 5 and 10 year mortgages.