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Hal Bundrick, CFP® · Senior Writer Updated Thu, December 11, 2025 at 12:07 AM GMT+8 5 min read The 10-year Treasury note is a fundraising tool of the U.S. government. Investors buy what is considered a safe, income-producing bond, and the government funds its operations. You may ask: Is it a good investment? What is the yield? Does the 10-year Treasury note have anything to do with mortgage rates — and if so, how?
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What is a Treasury note?
The 10-year Treasury note is issued by the U.S. Treasury to anyone willing to lend money to the United States in return for earning interest on the amount the government borrows. Anyone can buy Treasurys: individuals, financial institutions, and even foreign governments. The 10-year note is just one version of Treasury notes, which come in various maturities ranging from two to 10 years.
Interest on the bonds is paid every six months until the end of the term, which is called “maturity.” The interest rate of the note you buy is fixed and never changes.
Because Treasury notes are issued and backed by the U.S. government, they are considered among the safest investments available.
How the 10-year Treasury affects mortgage rates
The 10-year Treasury is a barometer of the economy. When yields rise, it's a sign of positive investor sentiment for a strong economy. However, when yields fall, buyers are seeking safety and security in an uncertain environment. As a result, it is a reference point for national long-term interest rates, especially mortgage rates.
However, home loan interest rates are determined by a variety of market factors, including:
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Overall economic conditions
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Financial markets as a whole
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Inflation
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Interest moves by the Federal Reserve
Yet, mortgage rates and the 10-year Treasury tend to move in unison. If the 10-year Treasury yield moves higher, mortgages typically do too — but with a margin of separation. Historically, the spread between the two has been between one to two percentage points. More recently, that spread has widened to over two percentage points.
For example, on Dec. 4, 2025, the 10-year Treasury yield was 4.11%, and the average 30-year mortgage rate was 6.19%. So, the spread was 2.08%.
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What is a Treasury yield?
A Treasury yield is the return you get on your investment. Very simply, it's interest — expressed as a percentage. You lend money to the government; it pays you fixed-rate interest every six months. If you buy a 10-year Treasury with a yield of 3%, you will earn 3% interest annually (and the interest does not compound). That interest payment is also called a coupon.
After 10 years, you are paid back your original investment. For example, you'll receive an interest payment every six months, and at the maturity of a $1,000 10-year Treasury note, you receive the $1,000 face value back — but no more interest payments.
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10-year Treasury yield chart
You can check the movement of 10-year Treasury yields at Yahoo Finance. The chart allows you to expand the historical data from one day to five years, or click “all” or “max” and make the chart full screen to stretch the 10-year Treasury rate history to early 1962.
Yields and prices: What they are and how they work
Every finance major can tell you about the "seesaw" effect of prices and yields. Both are considered economic indicators, and they move in opposite directions.
When prices go up, yields come down. Eager investors buying into the Treasury market drive note prices up. As a result, new Treasury buyers receive lower interest payments (yields). When yields fall, it suggests that investors believe inflation will move lower or the economy will slow.
When prices fall, yields move higher. New Treasury note buyers earn a higher return (yield) relative to the bond's price. Higher yields often indicate that investors believe higher inflation or stronger economic growth will occur.
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By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Subscribe10-year Treasury note FAQs
What is the difference between Treasury bills, notes, and bonds?
Treasury bills, T-notes, and bonds are the same debt instruments with different maturities. Treasury bills come in maturities from four to 52 weeks. Notes are generally issued in two- to 10-year maturities. Bonds are issued in maturities of either 20 or 30 years.
Is a 10-year Treasury a good investment?
Since Treasurys are considered risk-free, they are known as a good but low-return fixed-income investment. When it comes to investing, the lower the risk of loss, the lower the potential return. Investments with a greater risk of loss, such as ETFs, cryptocurrencies, and the stock market, have a higher possible return. Generally, wise investors use a mix of investments that balance a portfolio's overall risk and return.
How long do I have to hold a 10-year Treasury note?
You can sell a 10-year Treasury note anytime after holding it for a minimum of 45 days, but the full face value of the investment is only guaranteed if you hold it to maturity. Remember, market prices and yields vary daily, so you may sell at a loss if you don't have the note until the end of its term.
Can I buy a 10-year Treasury note?
Yes, you can buy a 10-year Treasury note. Treasurys are sold in digital form (paper Treasurys were phased out in 2011) through TreasuryDirect.gov. You only need a minimum purchase of $100, and you can buy notes in increments of $100 that mature in two, three, five, seven, or 10 years. Federal tax is due on the interest you earn annually, but Treasurys are not charged state or local taxes.
Laura Grace Tarpley edited this article.
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