It means that your effective rate of interest is 5%, not 10%. You would amortize the bond premium over the life of the loan--lowering your interest that you report on your tax return.

I understand that a bond with a higher coupon than the interest rate will sell at a premium, but what is its effect on YTM? 10% coupons on corporate junk bonds have a YTM of 5%. What could this mean?