What are Mortgage rates expected to do over the next five years?

That is a great question, and since we don't have a crystal ball, we can only speculate, but based on the nation's largest financial institutions, renowned economists and even the federal reserve forecasts, we can get a decent expectation by looking at the organization's predictions.   Mortgage rates have inched up since last week, but they are still near their three-year lows, according to Freddie Mac. The average 30-year fixed mortgage rate is currently 6.09%. However, where are rates headed in the next five years, and should you wait for rates to decrease before buying or refinancing?   Mortgage rates are determined by several factors, all of which can give us a clue to the future.

Mortgage rates are tuned to the government bond market

Mortgage rate forecasts may be best derived from trends in the 10-year bond market rates. 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 examine where Treasury yields are likely to head over 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 September, 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.  "Although we anticipate short-term interest rates to decline in the next couple of years, long-term interest rates are expected to remain elevated," he wrote. "Notably, we expect the 10-year Treasury yield to remain above 4.1% through 2030."   In fact, the range for this index is a high of 4.28 in 2026 and a low of 4.13 by 2030, so very little movement and improvement. 

That's not much movement. Goldman Sachs analysts expect the 10-year Treasury to rise over the long term to 4.5% by 2035.

Meanwhile, the Congressional Budget Office (CBO) forecasts the Treasury yield to be 3.9% by the end of 2026, then drop to 3.8% by 2030.

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: As of January 22, the 10-year Treasury yield opened at 4.25%, and the 30-year fixed mortgage rate was 6.09%. The spread was 6.09 - 4.25 = 1.84 percentage points.The spread is under two percentage points this week, which is one reason mortgage rates have decreased.

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 with the 10 Year average expected yields and estimated spreads:

5-YEAR MORTGAGE RATE FORECAST

YEAR 2026 2027 2028 2029 2030

10 year Treasury             4.28%                   4.18%                 4.14                     4.13%                 4.13%

Spread                              2.1 - 2.3                2.1 - 2.3             2.1 - 2.3               2.1 - 2.3             2.1 - 2.3

Rate forecast                   6.38% - 6.58%     6.28%-6.48%     6.24% - 6.44%     6.23% - 6.43%  6.23% - 6.43%

Of course, there are many factors that can drive rates up or down.  We didn't expect the financial crisis of 2008, we didn't expect COVID, so we don't know what tomorrow will bring, and this analysis is just way of looking at future rates.  For more on this, check out YAHOO FINANCE from Hal Bundrick, CFP.   

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