Some advertisements and offers on this page are from advertisers who pay us. That may influence which products we write about, but it does not affect what we write about them. Here's an explanation of how we make money and our Advertiser Disclosure.

Mortgage rate predictions for the next 5 years

How long will mortgage rates remain in the mid- to upper-6% range? Mortgage interest rates are determined by many factors, a major one being the 10-year Treasury yield. At Yahoo Finance, we’ve designed a five-year mortgage rate forecast, built on a 10-year yield correlation, that provides some insight.

Read more: The best mortgage lenders right now

Mortgage rates are tuned to the government bond market

Mortgage rate forecasts might best be derived from 10-year Treasury note trends. While the two rates often track in the same direction, there is a spread between them that we will account for below.

First, let's understand where Treasury yields are headed in the next five years. We'll combine human analysis with data pulled from artificial intelligence to put together a prediction.

Economists’ 5-year forecast for Treasury rates

Michael Wolf is a global economist at Deloitte Touche Tohmatsu Ltd. In June, the Deloitte Global Economics Research Center issued an updated U.S. economic forecast in which Wolf laid out the firm's Treasury yield expectations over the next five years.

"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," he wrote. "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."

Let's chart that forecast.

That's not much movement. Goldman Sachs analysts agree, saying the 10-year Treasury will remain near 4.1% through 2027.

Meanwhile, the Congressional Budget Office (CBO) forecasts the Treasury yield to be 4.1% by the end of 2025, down to 4% in 2026 and remaining near 3.9% through 2029.

Dig deeper: When will mortgage rates go down?

Best mortgage lenders for first-time home buyers of August 2025

Historical mortgage rates: How do they compare to current rates?

Estimating a 5-year spread

As we mentioned up top, the 10-year Treasury and 30-year fixed mortgage rates are separated by a spread. That difference between the two has been on either side of 2.5 percentage points in recent years. That's a significant change when compared to the spread from 2010 to 2020 when it was under two percentage points - and often near 1.5.

Using a 2.5 percentage point spread, here's an example of how Treasurys and mortgage rates compare:

10-year Treasury rate = 4%

Spread = 2.5 percentage points

Mortgage rates = 6.5%

Here's a recent example: On Aug. 14, 2025, the 10-year Treasury yield was 4.23%, and the 30-year fixed mortgage rate was 6.63%. The spread was 6.58 - 4.29 = 2.29 percentage points.

The latest version of artificial intelligence, GPT-5, suggested using a spread of 2.1 to 2.3 percentage points. Here is its rationale:

- Historical standard (2010s): ~1.7 pp

- Recent years (2022 to 2025): ~2.6 pp

- Estimated 5-year average spread: ~2.1 to 2.3 percentage points

Using these spread estimates, we can now complete our five-year mortgage rate forecast.

Read more: How to get the lowest mortgage rate possible

The 5-year mortgage rate forecast

Using the Treasury forecast from above, we add the spread between the bond market and 30-year fixed mortgage rates to compile a five-year forecast:

Learn more: When will mortgage rates go back down to 6%?

The margin of error

Of course, these are long-range estimates based on historical norms and broad expectations. All of these numbers could be thrown out the window if any of the following happens:

1. 10-year Treasurys outperform or underperform the forecast. For example, yields could crash in a severe economic setback, such as a recession.

2. The spread between Treasurys and mortgage rates narrows - or dramatically expands.

3. Monetary policy, as driven by the Federal Reserve, substantially changes.

Mortgage rate predictions for the next five years FAQs

Will we ever see a 3% mortgage rate again?

There is no forecast that predicts a 3% mortgage rate in the next five years. However, who saw such low home loan rates on the horizon in 2007 when rates were about where they are now? Things like the Great Recession and a global pandemic are rarely on the radar, and such black swan events are what it takes to move mortgage rates into the cellar.

Will mortgage rates drop in the next five years?

Based on the estimates above, rates are not expected to drop significantly in the next five years. However, a recession or other unknown disruption to the economy (such as a financial collapse or pandemic) could change the outlook.

Is it better to fix a rate for two or five years?

If you are considering an adjustable-rate mortgage with an initial fixed-rate period, you'll first want to consider how long you'll actually remain in the house you are financing. Then the long-term mortgage rate forecasting begins. The best idea is probably to choose the initial term that best fits your current budget.

What will mortgage rates be in 2027?

The analysis above predicts 2027 mortgage rates to be around 6.2% to 6.4%.

Laura Grace Tarpley edited this article.

Read More

Mortgage brokers: What they do and how much they cost

A mortgage broker helps you shop for the best mortgage lender and type of loan. Learn whether a mortgage loan broker is best for your situation.

What is an adjustable-rate mortgage, and should you get one?

An adjustable-rate mortgage (ARM) typically starts with a lower rate than a fixed-rate loan, but there are risks. Find out if an ARM is a good idea right now.

What is a mortgage note, and why do you need one?

A mortgage note is a legal document explaining your home loan's details, and you’ll sign it on closing day. Learn why mortgage notes are important for borrowers.

How a 40-year mortgage loan works

A 40-year mortgage has low monthly payments, but you’ll pay more interest and accumulate home equity slowly. Learn whether a 40-year mortgage loan is a good fit.

Mortgage-backed securities: How they impact the housing market and interest rates

Mortgage-backed securities (MBS) are a type of investment. Learn more about what MBS are, as well as how they impact the housing market and mortgage rates.

Up Next

Rates are still high. Should you lock in a mortgage rate now anyway?