What mortgage-backed securities yield in 2026: rates, spreads, buyers

Agency MBS yielded 5.86% on 8 October 2026 while the 30-year mortgage hit 7.40%. The layers between the two, the spread, and who still buys the bonds.

The Editors · Markets · 8 min read · Updated Oct 9, 2026

Top-view photography of houses at daytime

By the numbers

5.86%yield on the Bloomberg US MBS Index, 8 October 2026

7.40%average 30-year fixed mortgage rate, Freddie Mac, 8 October 2026

2.13 ppgap between the 30-year mortgage and the 10-year Treasury, week of 8 October 2026

$1.898Tagency MBS held by the Federal Reserve, 7 October 2026, down $188B in a year

$155.0Bagency securities held by Fannie Mae and Freddie Mac, end of August 2026

Agency mortgage-backed securities yielded 5.86% on 8 October 2026, measured by the Bloomberg US MBS Index that most MBS funds track. That is 0.64 percentage points over the 10-year Treasury at 5.22% the same day. A borrower taking out a 30-year fixed loan that week paid 7.40%, according to Freddie Mac's survey of 8 October 2026, up from 6.30% a year earlier. The mortgage rate sat 2.13 points over the 10-year, wider than in the first week of January 2026, before Fannie Mae and Freddie Mac started buying bonds to narrow it.

So "the MBS rate" is three or four different numbers. Which one you need depends on whether you own the bonds, borrow against a house, or are waiting for one of them to fall.

The four rates between the Treasury and your mortgage

Read them as a stack. Each layer is priced off the one below it.

Layer	Rate	Source and date
10-year Treasury	5.22%	US Treasury daily par yield curve, 8 October 2026
Agency MBS, whole market	5.86% yield to worst	Bloomberg US MBS Index via State Street, 8 October 2026
New-issue MBS (UMBS 30-year 6.5% coupon)	priced 100-21, just over par	Mortgage News Daily, close of 8 October 2026
30-year fixed mortgage	7.40%	Freddie Mac PMMS, 8 October 2026

5.22%5.86%6.5%7.4%

View as table

From the Treasury to the borrower, 8 October 2026
label	From the Treasury to the borrower, 8 October 2026
10-year Treasury	5.22%
Agency MBS index yield	5.86%
Coupon on new-issue MBS near par	6.5%
30-year fixed mortgage	7.4%

Source: US Treasury, Bloomberg US MBS Index via State Street, Mortgage News Daily, Freddie Mac PMMS; 8 October 2026

The index yield is the number a bond fund buyer gets. The new-issue coupon is what today's loans are packaged into: on 8 October the 6.5% bond traded at 100-21 and the 6.0% at 98-08, so the bond that trades at face value pays somewhere between the two. The mortgage rate is what the household pays. The gap from that coupon to 7.40%, roughly 0.9 to 1.4 points by our arithmetic, is the guarantee fee, the servicing strip and the lender's margin. Buying bonds does nothing to it.

Why the index yields less than new mortgages

The index holds every agency mortgage bond outstanding, and most of them were written when rates were low. The Bloomberg US MBS Index carried an average coupon of 3.77% and an average price of $87.73 per $100 of face value on 8 October 2026. The iShares MBS ETF, which tracks the same index, reported a 3.63% weighted coupon, a 5.87% yield to maturity and a 5.83-year effective duration on the same date.

That discount is where most of the 5.86% comes from. A bond paying 3.77% and bought at $87.73 earns its coupon plus the climb back to $100 as homeowners pay down principal. Homeowners holding 3% loans don't refinance or move much, so the climb is slow. It's also why the fund's 30-day SEC yield, which counts income only, was 4.50% on 8 October, well under the yield to maturity.

The spread over Treasuries, and why it's wider than in January

The extra yield MBS pay over Treasuries, adjusted for the homeowner's right to prepay, is the option-adjusted spread. On 8 October 2026 it was 40.56 basis points for the index and 37.12 for the iShares fund's portfolio.

The spread borrowers feel is the wider one, from the mortgage rate to the 10-year. We compute it weekly as Freddie Mac's survey rate minus the average 10-year constant maturity yield for the same week.

Week or period	Mortgage minus 10-year
1990 to 2021 average	1.67 pp
Peak, week of 1 June 2023	3.13 pp
2025 average	2.30 pp
Week of 8 January 2026	1.99 pp
Week of 22 January 2026, the 2026 low	1.83 pp
Week of 3 September 2026	1.93 pp
Week of 8 October 2026	2.13 pp

Fannie Mae and Freddie Mac began buying more agency bonds in January 2026, after the White House put a figure of up to $200 billion on the program. The spread fell about 16 basis points that month. In the week of 8 October it stood at 2.13, matching the widest reading of 2026 (week of 2 April) and 14 basis points above the first week of January. What we covered in September as a narrowing that stalled has now reversed in full, while the 10-year kept climbing.

Who buys agency MBS now

The two buyers Washington controls both hold less than they did at their 2026 highs.

The Federal Reserve is shrinking its pile. It held $1.898 trillion of agency MBS on 7 October 2026, against $2.086 trillion on 15 October 2025. The Fed ended balance sheet runoff on 1 December 2025, but its implementation note sends all principal repaid on its agency securities into Treasury bills. The MBS book still shrinks every month homeowners pay down principal.

Fannie Mae and Freddie Mac bought, then stopped adding. Their combined agency securities holdings went from $116.1 billion at the end of December 2025 to $166.6 billion at the end of April 2026, then slipped to $155.0 billion at the end of August. Fannie Mae held $99.8 billion and Freddie Mac $55.3 billion. Net of sales, that's $38.9 billion added in 2026, a fifth of the $200 billion headline. FHFA Director Bill Pulte said on 18 September that the two were "beginning to buy even more, large quantities", per WRE News, without numbers. September portfolio data had not been published when this page was written.

The room they have left is capped. Each company's mortgage portfolio is limited to $225 billion under its agreement with the Treasury. Measured the way that cap counts it, Fannie Mae stood at $175.2 billion and Freddie Mac at $159.5 billion on 31 August 2026. That leaves about $115 billion of combined headroom, and it covers mortgage loans as well as bonds.

What the numbers mean for you

If you own an MBS fund, you're earning about 0.6 points over the 10-year for taking prepayment risk, at a duration near six years. With an average coupon under 4%, few loans in the index will refinance unless rates fall a long way, so our read is that the index moves with rates much like a six-year Treasury, and little principal comes back early to reinvest at today's yields.

If you're waiting to borrow, the 10-year is still the number that moves your rate. The bond-buying program has stopped pulling the spread down, and the layer between the bond coupon and your rate is set by fees and lender margins that bond purchases don't reach.

What would change this page: a cut in Fannie Mae and Freddie Mac guarantee fees, a jump in their portfolio data for September, or the Fed reversing its decision to reinvest MBS paydowns into bills.

What changed

10 October 2026. First published. MBS yields from State Street (Bloomberg US MBS Index) and iShares, 8 October 2026; coupon prices from Mortgage News Daily, 8 October close; mortgage rate from Freddie Mac PMMS, 8 October; Treasury yield from the US Treasury, 8 October; Fed holdings from the H.4.1 via FRED, 7 October; GSE holdings from the Fannie Mae and Freddie Mac August 2026 monthly reports. Spread table computed by Market Anarchy from FRED weekly and daily series.