10-Year Yield at 5.31% Squeezes Refinance Takeouts for Private Lenders

The 10-year Treasury yield closed at 5.31% on Monday, Oct. 5, its highest daily close since May 2002, according to Treasury Department and Federal Reserve data. The benchmark that anchors most long-term real estate loan pricing finished the previous session, Friday, Oct. 2, at 5.28%.

The last time the 10-year closed higher was May 14, 2002, at 5.32%, according to the St. Louis Fed's FRED database. The yield has climbed from 4.44% at the end of June and from 4.18% a year earlier, on Oct. 6, 2025.

Where key lender benchmarks stand

Benchmark	Latest	Earlier
10-year Treasury yield	5.31% (Oct. 5)	5.29% (Sept. 30); 4.44% (June 30)
2-year Treasury yield	4.84% (Oct. 5)	4.88% (Sept. 30)
30-year Treasury yield	5.66% (Oct. 5)	5.64% (Sept. 30)
SOFR	3.88% (Oct. 2)	3.90% (Sept. 30)
Prime rate	7.00%	7.00% since Sept. 17
30-year fixed mortgage, Freddie Mac	7.28% (Oct. 1)	7.03% (Sept. 24)

Sources: U.S. Treasury, Federal Reserve Bank of New York, St. Louis Fed, Freddie Mac.

The long end is doing most of the moving. The Fed's target range has stayed at 3.75% to 4% since its Sept. 16 hike, and the Secured Overnight Financing Rate, the benchmark behind many bank and warehouse lines, was 3.88% on Oct. 2, the New York Fed reported. The 2-year yield has edged lower since Sept. 30.

The weekly mortgage survey has caught up. Freddie Mac said the 30-year fixed rate averaged 7.28% as of Oct. 1, up from 7.03% a week earlier and 6.34% a year ago. The 15-year fixed averaged 6.60%.

Hiring was slow in September. The Bureau of Labor Statistics said nonfarm payrolls rose by 29,000 in September and the unemployment rate was 4.2%.

What does a 5.31% 10-year mean for private lenders?

It raises the cost of the exit more than the cost of funding. Lines priced off SOFR or prime have barely moved in October, but long-term takeouts such as DSCR rental loans and agency mortgages price off longer yields, and those are at two-decade highs.

That matters for bridge and rehab books. A rental loan is sized off the property's rent and the rate at refinance, so a higher takeout rate means a smaller loan for the same property. Our explainer on how DSCR loans are sized shows the math: each half-point rise cuts roughly 5% from the maximum loan. Lenders with loans maturing in the next two quarters may want to identify which borrowers need a full refinance to repay.

For more on how the Fed's September move reached credit lines and investor yield expectations, see our analysis of the first hike since 2023.

Private credit investors are pulling back less

There was steadier news for capital raising. Reuters reported on Oct. 5 that withdrawal requests at Blue Owl Capital's $35.1 billion Blue Owl Credit Income Corp. fell to 16.8% of shares in the third quarter from 18.8% in the second. Requests at Goldman Sachs' $18.2 billion GS Credit fund fell to 2% of shares from 3.2%, Reuters said.

What to watch

Minutes from the Fed's Sept. 15–16 meeting are due Wednesday, Oct. 7, three weeks after the decision under the Fed's usual schedule. The Fed's next policy meeting is Oct. 27–28. Current figures are on our rates and benchmarks page.