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Decoding the Market: What is the Historical Spread Between 30-Year Mortgage and 10-Year Treasury? A Guide for Savvy Real Estate Investors

CHARLOTTE, NC – JULY 13, 2025: For real estate investors, understanding the intricate dance between macroeconomic indicators and mortgage rates is paramount to identifying lucrative opportunities. One of the most critical relationships to monitor is the spread between the 30-year fixed mortgage rate and the 10-year U.S. Treasury yield. This “spread” isn’t just a number; it’s a barometer of market sentiment, lender risk appetite, and ultimately, your borrowing costs.

Historical Spread Between 30-Year Mortgage and 10-Year Treasury:

At GHC Funding, we believe that informed investors are successful investors. That’s why we’ve compiled this comprehensive guide to help you navigate the complexities of this crucial spread, empowering you to make smarter financing decisions for your next investment in North Carolina and beyond.

The Foundation: Understanding the 30-Year Mortgage and 10-Year Treasury

Before we dive into the spread, let’s briefly define its components:

• 30-Year Fixed-Rate Mortgage: This is the most common type of mortgage for residential properties, including many investment properties. It offers a consistent interest rate over the entire 30-year term, providing predictable monthly payments.
• 10-Year U.S. Treasury Yield: Often considered a benchmark for long-term interest rates, the 10-year Treasury note’s yield reflects the return investors demand for lending money to the U.S. government for a decade. It’s perceived as a “risk-free” rate and serves as a foundational rate for many other financial products.

The Spread: A Window into Market Dynamics

The spread is simply the difference between the 30-year fixed mortgage rate and the 10-year Treasury yield. While these two rates generally move in tandem, the size of the spread can fluctuate significantly, providing valuable insights:

• What a “Normal” Spread Looks Like: Historically, the spread has averaged around 1.7 to 1.8 percentage points. This difference accounts for various factors that make mortgages inherently riskier and more costly for lenders than holding U.S. Treasury bonds. These factors include:
  • Credit Risk: The risk that a borrower might default on their mortgage.
  • Liquidity Risk: The ease with which a mortgage (or mortgage-backed security) can be bought and sold in the market.
  • Servicing Costs: The administrative expenses associated with managing mortgage loans.
  • Prepayment Risk: The risk that borrowers will refinance their mortgages when rates drop, leading to less interest income for lenders.
  • Lender Profit Margins: The return lenders aim to achieve on their mortgage portfolios.
• When the Spread Widens: A widening spread often signals increased market uncertainty, lender caution, or reduced investor appetite for mortgage-backed securities. This can occur during periods of economic stress, financial volatility, or high inflation, leading to higher borrowing costs for investors even if Treasury yields remain stable or decline. For instance, in recessions, the spread tends to “blow out” as the yield curve inverts, shortening the expected duration of mortgages and making their rates more aligned with shorter-term Treasury rates.
• When the Spread Narrows: Conversely, a narrowing spread suggests greater market confidence, lower perceived risk, and robust demand for mortgage-backed securities. This typically translates to more favorable borrowing conditions for investors.

What's the most appealing aspect of a DSCR loan for your investment property financing needs?

A) No personal income verification (no W-2s or tax returns needed!)B) Approval based on the property's cash flow (DSCR)C) Faster closing times compared to traditional mortgagesD) Flexibility for self-employed investors and complex financial situations

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Current Market Insights: Rates and Requirements (as of July 13, 2025)

Understanding the historical context is vital, but what does it mean for you today? As of July 13, 2025, the real estate investment landscape is dynamic, with rates influenced by global economic shifts and domestic monetary policy.

• Current Rate Environment: While specific rates vary by lender and borrower profile, current 30-year fixed mortgage rates for investment properties generally range from 6.75% to 7.50%. According to recent data, the national average 30-year fixed mortgage rate is around 6.72% – 6.74% for conventional loans, and slightly higher for investment properties. The 10-year Treasury yield is currently hovering around 4.35% – 4.43%. This puts the current spread in the range of 2.40% to 3.15%, indicating a wider spread than the historical average, reflecting ongoing market adjustments and inflation concerns. * (Source for rates: and , as of July 10-13, 2025 data).
• Factors Influencing Your Rate: Your individual interest rate will be determined by several key factors:
  • Loan-to-Value (LTV): A lower LTV (meaning a higher down payment) generally results in a better rate, as it reduces lender risk.
  • Debt Service Coverage Ratio (DSCR): For investment properties, DSCR is paramount. Lenders want to see a strong DSCR, ideally 1.25 or higher, indicating the property’s income comfortably covers its debt obligations.
  • Credit Score: While DSCR loans focus on property cash flow, a solid personal credit score (generally 680+) still signals responsible financial behavior and can secure more favorable terms.
  • Property Type: The type of investment property (e.g., single-family rental, multi-family, mixed-use, short-term rental) can influence perceived risk and, consequently, the rate.
  • Borrower Experience: Experienced investors with a proven track record may access more competitive rates.

The Advantage of DSCR Loans: Your Go-To for Investment Properties

For real estate investors, particularly those focusing on building a portfolio, traditional income-qualifying mortgages can be a significant hurdle. This is where DSCR Loans shine, offering a powerful alternative that aligns perfectly with the investment mindset.

DSCR Loans (Debt Service Coverage Ratio loans) are specifically designed for investment properties. Unlike conventional loans that heavily scrutinize personal income and debt-to-income (DTI) ratios, DSCR loans primarily qualify borrowers based on the rental income generated by the property itself.

Key Requirements & Benefits of DSCR Loans:

• No Personal Income Check: This is the most significant advantage for active investors. Lenders don’t require tax returns, pay stubs, or employment verification. Your personal income is not a primary qualifying factor.
• Property Cash Flow is King: The loan’s approval hinges on the property’s ability to generate sufficient income to cover its mortgage payments (principal, interest, taxes, and insurance). Lenders typically look for a DSCR of 1.20x or higher, meaning the property’s net operating income is at least 1.20 times its debt service.
• Flexible Entity Requirements: DSCR loans often accommodate various ownership structures, including LLCs, corporations, and partnerships, offering greater flexibility for sophisticated investors.
• Wide Range of Accepted Property Types: From single-family rentals and multi-family (2-8 units) to short-term rentals (Airbnbs) and even some mixed-use properties, DSCR loans offer financing for diverse investment strategies.
• Faster Closings: With less personal documentation required, DSCR loan processes can be significantly streamlined, leading to quicker closing times.
• No Limit on Number of Loans: Unlike conventional loans that cap the number of financed properties, DSCR loans allow investors to scale their portfolios without artificial restrictions.
• Minimum Credit Score: While not as stringent as traditional loans, a minimum credit score (often in the 620-680 range) is still typically required.
• Down Payment/LTV: Expect down payments ranging from 20% to 30% or more, depending on the property type and desired LTV. LTVs up to 80% are common.
• Cash Reserves: Lenders usually require proof of 3-6 months of reserves to cover mortgage payments.

GHC Funding: Your Preferred Partner for Investment Property Financing

At GHC Funding, we understand the unique needs of real estate investors. We are not just a lender; we are a strategic partner dedicated to empowering your investment journey. Our expertise in DSCR Loans, alongside our comprehensive offerings of SBA 7a Loans, SBA 504 Loans, Bridge Loans, and Alternative Real Estate Financing, positions us as the go-to resource for investors seeking flexible and efficient capital solutions.

Why GHC Funding is Uniquely Suited for Your Investment Needs:

• Flexible Underwriting: We offer more agile and investor-centric underwriting processes, prioritizing property cash flow and asset strength over personal income and W-2s. This means less paperwork and faster approvals for you.
• Market Expertise: Our team possesses in-depth knowledge of the real estate investment market, including the nuanced dynamics of the 30-year mortgage and 10-year Treasury spread. We can provide tailored advice and solutions that align with current market conditions and your investment goals.
• Streamlined Process: We are committed to a transparent and efficient loan process, from initial inquiry to closing. Our dedicated professionals guide you every step of the way, minimizing headaches and maximizing your time.
• Broad Product Portfolio: Whether you need a DSCR Loan for a new rental acquisition, an SBA loan for an owner-occupied commercial property, or a Bridge Loan to seize a short-term opportunity, GHC Funding () has the diverse financing options to support your diverse portfolio.

Targeting Your Success: Real Estate Investment in North Carolina

North Carolina stands out as a prime destination for real estate investors, boasting a diverse economy, strong population growth, and a favorable business environment. Leveraging robust geo-targeting strategies is crucial for maximizing your investment potential in the Tar Heel State.

Key Investment Hubs and Opportunities in North Carolina:

• Charlotte (Mecklenburg County): A booming financial and economic hub, Charlotte offers robust opportunities in residential rentals (both single-family and multi-family) in neighborhoods like Uptown (28202), South End (28203), and NoDa (28205). With major employers in banking, healthcare, and technology, demand for housing remains strong. Consider investing in townhomes for young professionals or single-family homes near burgeoning commercial districts.
• Raleigh-Durham (Triangle Area – Wake and Durham Counties): Home to Research Triangle Park, this region is a magnet for tech, biotech, and educational institutions, driving consistent demand for rental properties. Explore opportunities in Downtown Raleigh (27601) for urban apartments, Cary (27513) for family-friendly rentals, or Durham’s booming historic districts (27701) for renovated multi-family units. The presence of major universities like Duke and NC State creates a steady tenant pool for student housing and young professional rentals.
• Greensboro-Winston-Salem (Triad Area – Guilford and Forsyth Counties): This region offers more affordable entry points with solid rental yields. Focus on areas undergoing revitalization, such as Downtown Greensboro (27401) for commercial conversions or Winston-Salem’s historic West End (27101) for charming single-family rentals. The burgeoning advanced manufacturing and logistics sectors are attracting new residents and workforce housing needs.
• Coastal Markets (e.g., Wilmington – New Hanover County, Outer Banks – Dare County): For investors interested in short-term rentals and vacation properties, coastal North Carolina offers unique opportunities. Areas around Carolina Beach (28428) and Nags Head (27959) are popular tourist destinations, making them ideal for DSCR loans tailored to short-term rental income.
• Western North Carolina (e.g., Asheville – Buncombe County): Known for its vibrant arts scene and natural beauty, Asheville presents opportunities in both long-term and short-term rentals. Consider properties in Downtown Asheville (28801) or West Asheville (28806), catering to a diverse demographic including tourists and remote workers.

Major Economic Drivers and Landmarks influencing North Carolina Real Estate:

• Technology and Innovation: Research Triangle Park, various tech incubators, and a growing startup scene.
• Healthcare: Major hospital systems (Atrium Health, Duke Health, UNC Health) are significant employers.
• Advanced Manufacturing: A strong presence of manufacturing facilities, particularly in the automotive and aerospace sectors.
• Financial Services: Charlotte is a major financial center, second only to New York City.
• Education: Prestigious universities and colleges across the state attract students and faculty.
• Tourism: Coastal and mountain regions draw millions of visitors annually, supporting the short-term rental market.

Frequently Asked Questions (Q&A) for Real Estate Investors

Here are some common questions real estate investors might have regarding the mortgage-Treasury spread and investment property financing:

Unlock Your Investment Potential with GHC Funding

Understanding the historical spread between the 30-year mortgage and 10-year Treasury is a powerful tool for any serious real estate investor. It provides context for current market conditions and helps you anticipate future trends. However, translating that knowledge into actionable investment strategies requires the right financing partner.

At GHC Funding, we are committed to providing real estate investors in North Carolina and across the nation with the flexible, efficient, and tailored financing solutions you need to thrive. Our expertise in DSCR Loans is a game-changer for those looking to expand their portfolios based on property cash flow, not personal income.

Ready to seize your next investment opportunity in North Carolina – from the bustling markets of Charlotte and Raleigh to the scenic beauty of Asheville and Wilmington?

Don’t let traditional lending hurdles slow you down. Explore the power of DSCR loans and other innovative financing options.

Visit GHC Funding today at to learn more about our loan programs, get current rates, and speak with one of our experienced advisors. Let us help you turn market insights into tangible real estate success.

Valuable North Carolina Real Estate Investor Resources:

• North Carolina Real Estate Commission: Your official source for licensing laws, regulations, and consumer protection in North Carolina real estate. Visit their website for important updates and guidelines:
• Carolinas Real Estate Investors Association (CREIA): A non-profit organization dedicated to enhancing members’ knowledge of real estate investment through education and networking. Explore their resources and events:
• North Carolina Real Estate Investing Clubs Directory (via ezLandlordForms): A comprehensive listing of various real estate investor associations across North Carolina, including contact information and meeting details. Find a local group to connect with:
• Zillow North Carolina Housing Market Overview: Get current home values, market trends, and detailed rental data for various North Carolina areas. A great resource for understanding local market dynamics:
• NC REALTORS® Market Data: Access monthly statewide snapshots and county-level reports on the North Carolina housing market, including sales data, median prices, and inventory levels:

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