Mortgage rate predictions: Mortgage rate forecast for the next 5 years: What economists say homebuyers should expect
How Do Mortgage Rates Track the 10-Year Treasury Yield?
Mortgage rates generally follow the direction of the 10-year Treasury note, but the two rarely match exactly. Usually a difference of a few percentage points separates them. To understand where mortgage rates might go, analysts first look at what Treasury yields will be.
Deloitte Forecast: 10-Year Treasury Bond Expected to Fall After 2026
Michael Wolf, global economist at Deloitte Touche Tohmatsu Ltd, outlined the firm’s updated expectations in a June report laying out 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 by Yahoo Finance.
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10-Year Treasury Return Forecast
| Year | Surrender |
| 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 and predict 10-year yields will remain around 4.1% through 2027.
The Congressional Budget Office is in line with this outlook, predicting that 10-year growth will end at 4.1% in 2025, decline to 4% in 2026, and approach 3.9% by 2029.
How Does the 2.1% – 2.3% Difference Shape the Five-Year Mortgage Rate Forecast?
In recent years, the spread between the interest rate on a 10-year Treasury bond and the average 30-year fixed mortgage has widened, usually around 2.5 percent. This is a significant change compared to the 2010-2020 period, when the gap was often close to 1.5 to 2 points.
A simple example:
- If the 10-year Treasury bond is 4 percent and the difference is 2.5 percentage points, mortgage rates will be closer to 6.5 percent.
- On November 26, the 10-year yield opened at 4% and the average 30-year mortgage rate was 6.23%, and the difference reached 2.23 points.
Yahoo Finance used the latest version of GPT-5, which recommends using a narrower spread of 2.1 to 2.3 percentage points depending on historical change:
- 2010s: roughly 1.7 points
- 2022–2025: roughly 2.6 points
- Estimated five-year average: 2.1–2.3 points
Next 5 Year Mortgage Interest Forecast
Using these estimates, Yahoo Finance created a five-year mortgage rate forecast based on projected Treasury yields and the expected difference.
| Year | Treasury Estimate | Percentage Point Difference | Mortgage Rate Estimate |
| 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 Change Mortgage Rates Over the Next Five Years
As with any long-term outlook, there is a wide margin of uncertainty. Estimates may increase if Treasury yields move sharply in either direction, especially in the event of a major economic downturn or if the spread between mortgage rates and Treasuries suddenly narrows or widens. A significant change in Federal Reserve policy could also reshape the landscape.
FAQ
What does it take to predict future mortgage rates?
Projected Treasury yield plus estimated spread.
Why are Treasury bonds important for mortgages?
Lenders use Treasury yields as a guide when pricing 30-year fixed mortgage rates.
