How long will mortgage rates remain in the range of medium to 6%? The mortgage rate depends on many factors, which is the fiscal rate of return for 10 years. At Yahoo Finance, we designed five years of mortgage rate forecasting that builds on a 10-year earnings relevance and provides some insights.
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Mortgage rate forecasts are best derived from the 10-year Treasury note trend. While these two rates will usually track in the same direction, there is a distribution between them that we will consider below.
First, let us understand where the fiscal yields will be in the next five years. We combine artificial scientists’ analysis with data acquired by artificial intelligence to make predictions.
Michael Wolf is Deloitte Touche Touche Tohmatsu Ltd.
“We expect the remaining 10-year inventory yields for the year will hover for the rest of the year despite softening economic data and a 50-year basis in the fourth quarter of 2025,” he wrote. “The 10-year fiscal yields began to decline slowly in 2026, down to 4.1% by 2027 and remained there until the end of 2029.”
Let's draw the prediction.
That's not a lot of action. Goldman Sachs analysts agreed, saying that the Treasury Department will remain close to 4.1% in 10 years by 2027.
Meanwhile, the Congressional Budget Office (CBO) predicts that the Treasury Department's yield will be 4.1% by the end of 2025, falling to 4% in 2026 and will be close to 3.9% by 2029.
More in-depth: When will mortgage rates fall?
As we mentioned, the 10-year Treasury and 30-year fixed mortgage rates are separated by interest rate spreads. In recent years, this difference between the two has been 2.5 percentage points on both sides. This is a significant change compared to the difference from 2010 to 2020, when it was less than two percentage points (usually close to 1.5).
Using 2.5 percentage points of spread, here is an example of how the Ministry of Finance and mortgage rates compare:
10-year Treasury bond = 4%
Point = 2.5 percentage points
Mortgage Rate = 6.5%
Here is a recent example: On August 14, 2025, the fiscal yield for 10 years was 4.23%, and the fixed mortgage rate for 30 years was 6.63%. The spread is 6.58-4.29 = 2.29 percentage points.
The latest version of AI GPT-5 recommends a difference of 2.1 to 2.3 percentage points. Here is the reason:
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Historical Standards (2010s): ~1.7 pp
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In recent years (2022 to 2025): ~2.6 pp
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Estimated average price difference in 5 years: ~2.1 to 2.3 percentage points
Using these variance estimates, we can now complete our five-year mortgage rate forecast.
Read more: How to get the minimum mortgage rate
Using the treasury forecast above, we increase the spread between the bond market and the 30-year fixed mortgage rate by five years:
learn more: When will mortgage rates drop to 6%?
Of course, these are long-term estimates based on historical norms and broad expectations. All of these numbers can be thrown out of the window if any of the following occurs:
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The 10-year Treasury forecast for better or worse performance. For example, yields can collapse in a serious economic setback, such as recessions.
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The difference between the Treasury and mortgage rates narrows – or greatly expands.
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There has been substantial changes in the Fed-driven monetary policy.
There is no forecast for 3% of mortgages predicted over the next five years. But who had such a low rate of interest rates in 2007, when the interest rates were at their current position? Things like the Great Depression and the global pandemic are rarely on radar, and such black swan events are what is needed to transfer mortgage rates to the cellar.
According to the above estimates, interest rates are not expected to drop significantly in the next five years. However, an economic recession or other unknown damage, such as a financial crash or a pandemic, could change the outlook.
If you are considering an adjustable rate mortgage with an initial fixed rate term, first consider how long it takes to actually stay in the financing home. Then start the long-term mortgage rate forecast. The best idea is probably to choose the initial semester that best suits your current budget.
The above analysis predicts that mortgage rates will be around 6.2% to 6.4% in 2027.
Laura Grace Tarpley Edited this article.