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content:2. [Personal Finance](https://finance.yahoo.com/personal-finance/)
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4. [Mortgages](https://finance.yahoo.com/personal-finance/mortgages/)
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What are the mortgage rate predictions for the next 5 years?
============================================================
[](/author/hal-bundrick)
[Hal Bundrick, CFP®](/author/hal-bundrick) · Senior Writer
Updated Fri, December 5, 2025 at 4:39 PM GMT+1 4 min read
Mortgage rates have dropped by a half-point over the last year, according to Freddie Mac. However, those looking to buy a house or refinance in the next few years may wonder where rates are headed in the long term. [Mortgage interest rates are determined by several factors](https://finance.yahoo.com/personal-finance/mortgages/article/what-determines-mortgage-rates-182515831.html), with the 10-year Treasury yield being a primary one. At Yahoo Finance, we’ve designed a five-year mortgage rate forecast, built on a 10-year yield correlation, that provides some insight.
* ***MORE:*** [*Learn about the best mortgage lenders right now.*](https://finance.yahoo.com/personal-finance/mortgages/article/best-mortgage-lenders-173044403.html)
Mortgage rates are tuned to the government bond market
------------------------------------------------------
Mortgage rate forecasts might best be derived from [10-year Treasury note](https://finance.yahoo.com/personal-finance/mortgages/article/10-year-treasury-note-170612896.html) 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](https://tech.yahoo.com/ai/) 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](https://www.deloitte.com/us/en/insights/topics/economy/us-economic-forecast/united-states-outlook-analysis.html) 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.
* [*Learn why mortgage rates increased after the Federal Reserve rate cut.*](https://finance.yahoo.com/personal-finance/mortgages/article/why-are-mortgage-rates-increasing-after-fed-cut-rate-165115956.html)
* [#### Historical mortgage rates: See how rates have changed over time](https://finance.yahoo.com/personal-finance/mortgages/article/historical-mortgage-rates-164750874.html)
---
* [#### Low-cost refinance: How to cut fees and save more on your mortgage](https://finance.yahoo.com/personal-finance/mortgages/article/how-to-get-a-low-cost-refinance-170615242.html)
---
* [#### HELOC and home equity loan interest rates: How they work and what you can expect to pay](https://finance.yahoo.com/personal-finance/mortgages/article/how-are-heloc-and-home-equity-loan-rates-determined-181516814.html)
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 Dec. 4, 2025, the 10-year Treasury yield opened at 4.09%, and the 30-year fixed mortgage rate was 6.19%. The spread was 6.19 - 4.09 = 2.10 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.
* [*Here are 8 strategies for getting the lowest mortgage rate possible.*](https://finance.yahoo.com/personal-finance/mortgages/article/lowest-mortgage-rates-155235056.html)
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:
* [*Read about when mortgage rates will go back down to 6%.*](https://finance.yahoo.com/personal-finance/mortgages/article/when-will-mortgage-rates-go-down-to-6-195022219.html)
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](https://finance.yahoo.com/personal-finance/banking/article/what-is-a-recession-173553904.html).
2. The spread between Treasurys and mortgage rates narrows — or dramatically expands.
3. Monetary policy, as driven by the [Federal Reserve](https://finance.yahoo.com/personal-finance/mortgages/article/the-fed-didnt-lower-its-rate-this-month-how-does-this-decision-affect-mortgage-rates-203137081.html), substantially changes.
[*Discover the mortgage lenders with the best interest rates this week.*](https://finance.yahoo.com/personal-finance/mortgages/article/mortgage-lenders-with-best-rates-this-week-november-3-2025-170834146.html)
Mortgage rate predictions for the next 5 years FAQs
---------------------------------------------------
### Will mortgage interest rates ever be 3% again?
There is no forecast that [predicts a 3% mortgage rate](https://finance.yahoo.com/personal-finance/mortgages/article/will-mortgage-rates-ever-be-3-again-183831629.html) 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 drastic events are what it takes to move mortgage rates into the cellar.
### What will mortgage rates be in 2027?
The analysis above predicts 2027 mortgage rates to be around 6.2% to 6.4%.
### Will mortgage rates drop in the next 5 years?
Based on the estimates above, [mortgage rates are not expected to drop significantly](https://finance.yahoo.com/personal-finance/mortgages/article/when-will-mortgage-rates-go-down-rates-bounce-back-up-after-the-fed-meeting-190610619.html) 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 2 or 5 years?
If you are considering an [adjustable-rate mortgage](https://finance.yahoo.com/personal-finance/mortgages/article/adjustable-rate-mortgage-155738644.html) 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 approach is probably to select the initial term that best suits your current budget.
[*Laura Grace Tarpley*](https://finance.yahoo.com/author/laura-grace-tarpley/) *edited this article.*
[](https://finance.yahoo.com/personal-finance/mortgages/article/best-mortgage-lenders-173044403.html "Best mortgage lenders of December 2025")
[### Best mortgage lenders of December 2025
The best mortgage lenders offer low interest rates, a range of loan programs, and high customer satisfaction. Choose the best mortgage lender for your needs.](https://finance.yahoo.com/personal-finance/mortgages/article/best-mortgage-lenders-173044403.html "Best mortgage lenders of December 2025")
[](https://finance.yahoo.com/personal-finance/mortgages/article/40-year-mortgage-181845597.html "How a 40-year mortgage loan works")
[### 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.](https://finance.yahoo.com/personal-finance/mortgages/article/40-year-mortgage-181845597.html "How a 40-year mortgage loan works")
[](https://finance.yahoo.com/personal-finance/mortgages/article/best-mortgage-lenders-first-time-buyers-202829998.html "Best mortgage lenders for first-time home buyers of December 2025")
[### Best mortgage lenders for first-time home buyers of December 2025
The best mortgage lenders for first-time buyers offer low interest rates and strong customer service. Find the best lender to help you buy your dream home.](https://finance.yahoo.com/personal-finance/mortgages/article/best-mortgage-lenders-first-time-buyers-202829998.html "Best mortgage lenders for first-time home buyers of December 2025")
[](https://finance.yahoo.com/personal-finance/mortgages/article/how-do-you-pay-back-a-reverse-mortgage-153844523.html "How and when do you pay back a reverse mortgage?")
[### How and when do you pay back a reverse mortgage?
Paying back a reverse mortgage is necessary upon death or selling the home, and there are ways to repay the funds early. Learn more about your options.](https://finance.yahoo.com/personal-finance/mortgages/article/how-do-you-pay-back-a-reverse-mortgage-153844523.html "How and when do you pay back a reverse mortgage?")
[](https://finance.yahoo.com/personal-finance/mortgages/article/questions-to-ask-home-loan-lender-130059277.html "Questions to ask a home loan lender")
[### Questions to ask a home loan lender
Having the right questions to ask your home loan lender can help you find the best mortgage terms for your financial situation.](https://finance.yahoo.com/personal-finance/mortgages/article/questions-to-ask-home-loan-lender-130059277.html "Questions to ask a home loan lender")
[](https://finance.yahoo.com/personal-finance/mortgages/article/refinancing-your-mortgage-before-the-end-of-2025-182957381.html "Want to refinance your mortgage before the end of 2025? Here's what to do.")
[### Want to refinance your mortgage before the end of 2025? Here's what to do.
If you want to refinance your mortgage before the end of 2025, you're in luck. It may be a good time. Learn the steps to take to refi in the next couple of months.](https://finance.yahoo.com/personal-finance/mortgages/article/refinancing-your-mortgage-before-the-end-of-2025-182957381.html "Want to refinance your mortgage before the end of 2025? Here's what to do.")
* [#### Historical mortgage rates: See how rates have changed over time](https://finance.yahoo.com/personal-finance/mortgages/article/historical-mortgage-rates-164750874.html)
---
* [#### Low-cost refinance: How to cut fees and save more on your mortgage](https://finance.yahoo.com/personal-finance/mortgages/article/how-to-get-a-low-cost-refinance-170615242.html)
---
* [#### HELOC and home equity loan interest rates: How they work and what you can expect to pay](https://finance.yahoo.com/personal-finance/mortgages/article/how-are-heloc-and-home-equity-loan-rates-determined-181516814.html)
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