Mortgage Banking

Making sense of commercial real estate finance.


Posted by Jordan Crouch on October 8, 2007

Most interest rates for loans on commercial property are based off a spread over the 10 year US treasury Bill. Here’s a graph of the 10 yr. from Jan to today.


The yield on the ten year t-bill usually floats with the economy. If the economy is up, the yield is up. If the economy is down, the yield is down. That said, if I had a graph with the ten year yield and the S&P together, it would show it doesn’t always follow as closely or at all.

Even so, watching the economy helps to estimate what the 10 year will do. How does one watch the economy? Well, this week, look for companies’ quarterly earnings reports to be released. If the reports are good, everything goes up. If they are bad (or sometimes just average), the economy goes down. How many reports have to go one way or the other? It depends on which companies and by how much their reports go North or South.

Quick Facts:

10 year T-Bill: 4.64% (as of Monday 12:15 EST)
Last week’s range: 4.49% to 4.58%
YTD high: 5.25%
YTD low : 4.38%


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