How Mortgage Rates Track the 10-Year Treasury Yield
Mortgage rates generally follow the direction of the 10-year Treasury note, though the two rarely match exactly. A spread, typically a couple of percentage points, separates them. To understand where mortgage rates may be headed, analysts first look at what’s coming for Treasury yields.
Deloitte Forecast: 10-Year Treasury Expected to Decline After 2026
Global economist at Deloitte Touche Tohmatsu Ltd, Michael Wolf, outlined the firm’s updated expectations in a June report that laid out the firm’s Treasury yield expectations over the next five years.
He wrote, “We expect the 10-year Treasury yield to hover near 4.5% for the remainder of this year, despite a softening in economic data and a 50-basis-point cut from the Fed in the fourth quarter of 2025,” adding, “The 10-year Treasury yield begins to decline slowly in 2026, falling to 4.1% by 2027 and remaining there through the end of 2029,” as quoted by Yahoo Finance.
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10-Year Treasury Yield Forecast
| Year | Yield |
| 2025 | 4.5% |
| 2026 | 4.3% |
| 2027 | 4.1% |
| 2028 | 4.1% |
| 2029 | 4.1% |
Goldman Sachs and CBO Align on Long-Term Treasury Yield Outlook
Goldman Sachs analysts share a similar view, projecting the 10-year yield will stay near 4.1% through 2027.
The Congressional Budget Office is also in line with that outlook, forecasting the 10-year to end 2025 at 4.1%, dip to 4% in 2026, and settle near 3.9% through 2029.
How a 2.1%–2.3% Spread Shapes the Five-Year Mortgage Rate Forecast
In recent years, the gap between the 10-year Treasury and the average 30-year fixed mortgage rate has been wide, often around 2.5 percentage points. That’s a notable shift from the 2010–2020 period, when the spread frequently hovered closer to 1.5 to 2 points.
A simple example:
- If the 10-year Treasury is at 4% and the spread is 2.5 percentage points, then mortgage rates would stand near 6.5%.
- On November 26, the 10-year yield opened at 4% and the average 30-year mortgage rate was 6.23%, placing the spread at 2.23 percentage points.
Yahoo Finance used the latest version of GPT-5 suggested using a narrower spread, between 2.1 and 2.3 percentage points, based on the historical shift:
- 2010s: roughly 1.7 points
- 2022–2025: roughly 2.6 points
- Estimated five-year average: 2.1–2.3 points
Mortgage Rates Prediction For Next 5 Years
Using these estimates, Yahoo Finance built a five-year mortgage rate forecast based on projected Treasury yields and the expected spread.
| Year | Treasury Forecast | Percentage Point Spread | Mortgage Rate Forecast |
| 2025 | 4.5% | 2.1 – 2.3 | 6.6% – 6.8% |
| 2026 | 4.3% | 2.1 – 2.4 | 6.4% – 6.6% |
| 2027 | 4.1% | 2.1 – 2.5 | 6.2% – 6.4% |
| 2028 | 4.1% | 2.1 – 2.6 | 6.2% – 6.4% |
| 2029 | 4.1% | 2.1 – 2.7 | 6.2% – 6.4% |
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Key Economic Risks That Could Shift Mortgage Rates Over the Next Five Years
As with any long-range outlook, there’s a wide margin of uncertainty. Forecasts could be upended if Treasury yields move sharply in either direction, particularly in the case of a major economic downturn, or if the spread between mortgage rates and Treasurys suddenly tightens or widens. A significant shift in Federal Reserve policy could also reshape the landscape.
FAQS
What is needed to estimate future mortgage rates?
A projected Treasury yield plus the estimated spread.
Why do Treasurys matter for mortgages?
Lenders use Treasury yields as a guide when pricing 30-year fixed mortgage rates.