Why the 10-Year vs. 30-Year Mortgage Spread Might Be the Most Important Thing No One’s Talking About

Hello everyone! In this week’s update, I’ve got two things you’ll want to know: why the spread between mortgage rates and the 10-Year Treasury matters more than ever, and how “Buy Before You Sell” programs are making a real impact for some buyers.

Let’s get into it 👇

Read time: ~3 minutes

Rates ended FLAT compared to last week, and volatility was HIGH. Rates are in the high 6’s for most loan types without paying discount points. Paying discount points can get you in the mid 6’s.

Why the 10-Year vs. 30-Year Mortgage Spread Might Be the Most Important Thing No One’s Talking About

If you've ever heard someone say mortgage rates track the 10-year Treasury yield, they’re not wrong—but that’s only part of the story. What really drives mortgage rates is the spread between the two, and understanding that spread is key to understanding today’s market.

Let’s break it down 👇

🔍 What’s the Spread?

The 10-year Treasury is the baseline for borrowing. Mortgage rates are that baseline plus extra risk padding.

• That padding—or “spread”—has averaged 1.6%–1.8% historically.

• But in 2023, it hit over 3% (yikes).

• Today? It’s around 2.29%, still elevated.

📉 Why It Matters:

This spread is one of the reasons why mortgage rates don’t always move perfectly with the 10-year yield, and a big spread means rates are higher than they should be based on the 10-year alone.

➡ If the spread normalized today, buyers could see rates 0.5%–0.7% lower.
➡ If it widened again like in 2023, we’d be 0.8% higher than today.

So yes, the spread matters—a LOT.

💥 What Makes It Widen?

• Market volatility and inflation fears

• Low demand for mortgage-backed securities

• Lenders padding margins in case of recession

📈 How It Shrinks:

When the Fed stops hiking, inflation cools, and confidence in the mortgage market grows, investors come back—and spreads tighten. That could pull mortgage rates lower fast, even without any Fed intervention.

Sick of Contingent Offers? This Strategy Changes Everything

I usually use this space to cover market trends and economic updates but once in a while, a loan strategy comes along that’s too impactful not to share.

Right now, our Buy Before You Sell option through NAF Cash is saving deals left and right.

Here’s how it works:

If your client has strong equity in their current home, we may be able to help them buy their next home with a non-contingent, all-cash offer—without selling first. That means:

✅ No contingent offers

✅ No rushed moves

✅ Less stress!!

Just last month, we helped several buyers win offers that other lenders said weren’t possible. They were told they had to sell first—but with the right strategy and NAF Cash, we flipped them into true cash buyers and kept the deals clean.

Two Ways My Team & I Can Help

1. Lets collaborate- Schedule a zoom meeting

2. Tough Deal? Let us know if we can help