The 30-year mortgage rates fluctuate due to factors aside from changes in the Federal Reserve’s federal funds rate. Although Federal Reserve actions can influence these rates, additional elements contribute to rate movements.
A 30-year fixed-rate mortgage generally exceeds the yield on the 10-year U.S. Treasury note by approximately 2% to 2.5%. This difference, referred to as the “spread,” varies depending on market conditions and risks associated with mortgages. When the 10-year Treasury yield increases, mortgage rates typically rise as well, though there is a variable margin between them. Historically, this spread has ranged from one to two percentage points but has recently expanded beyond two percentage points. For instance, on September 11, 2025, the 10-year Treasury yield was 4.01%, while 30-year mortgage rates were at 6.35%.
The U.S. Federal Reserve influences short-term borrowing costs by adjusting the federal funds rate, which determines the interest banks pay each other for overnight loans from their reserves held at the Fed. This rate indirectly affects mortgage rates; as bank borrowing costs change, consumer borrowing costs tend to follow. When the Fed keeps the federal funds rate stable, lenders usually maintain mortgage rates within a consistent range.
For example, during 2022 and 2023, the Fed increased the key interest rate to address inflation, resulting in higher borrowing costs for consumers. Occasionally, mortgage rates do not align directly with changes made by the Fed. Despite three rate cuts at the end of 2024, mortgage rates remained high or even rose.
Mortgage rates adjust according to movements in the Treasury yield, though they remain higher than the yield by a set spread or margin. If you are looking for lower mortgage rates, we want the 10-year treasury yields to go down and the price to go up.
You can keep an eye on the 10-year treasury yields. Or just email or call me for a quote.
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