Mortgage Rate Predictions for the Next 5 Years (2026–2030)
- Author: Margaret Hills
- Posted: 2026-01-07
How Are Mortgage Rates Set?
Mortgage rates often follow changes in the government’s 10-year Treasury yield. The difference between these two rates is called the "spread," and it helps analysts predict where mortgage rates might go.
What Do Economists Predict?
- Deloitte: Economist Michael Wolf expects long-term interest rates to stay high over the next five years. Their forecast suggests the 10-year Treasury yield will stay above 4.1% through 2030.
- Goldman Sachs: Predicts the yield will rise to 4.5% by 2035.
- Congressional Budget Office (CBO): Estimates the yield will be at 3.9% by the end of 2026, then drop slightly to 3.8% by 2030.
For this summary, we’ll use the Deloitte forecast because it falls between the other predictions.
Understanding the Spread
Mortgage rates tend to be higher than the Treasury yield. Recently, the spread has been around 2.5 percentage points, which is more than it was in the 2010s (when it was about 1.5 to 2 points).
So, if the Treasury yield is 4% and the spread is 2.5%, mortgage rates will be about 6.5%.
Recent data shows that this spread has been around 2.1 to 2.3 percent, and artificial intelligence models suggest this range will continue over the next five years.
Forecast for Mortgage Rates: 2026–2030
By adding the expected spread to the forecasted Treasury yield, analysts predict that 30-year fixed mortgage rates will be:
- Around 6.3% to 6.5% over the next five years
- Things That Could Change the Forecast
These long-term predictions can change if:
- The Treasury yield goes up or down more than expected (for example, during a recession)
- The spread between Treasury rates and mortgage rates becomes smaller or larger
- The Federal Reserve changes its monetary policy in unexpected ways
Frequently Asked Questions
Will mortgage rates ever be 3% again?
No forecasts see mortgage rates dropping to 3% in the next five years. However, unpredictable events (like the Great Recession or the COVID-19 pandemic) can cause major changes that nobody expects.
What will mortgage rates be in 2027?
Rates are expected to be about 6.3% to 6.5%.
Will mortgage rates drop in the next 5 years?
Current predictions do not show rates falling much. A major economic event would need to occur for rates to drop significantly.
Is it better to fix your rate for 2 or 5 years?
Consider how long you plan to stay in your home. Pick the mortgage option that fits your budget and future plans.
-
