Finance term
10-Year Treasury Rate
Also known as: 10-year Treasury yield, T-note rate, DGS10
Definition
The 10-year Treasury rate is the yield on U.S. government bonds maturing in 10 years. It is the benchmark long-rate watched by lenders when pricing fixed-rate term loans, SBA 504 debentures, commercial real estate debt, and adjustable-rate mortgages.
Detailed explanation
The 10-year Treasury yield (series DGS10) is published daily by the Federal Reserve Board and represents what investors demand to lend money to the U.S. government for 10 years. Because U.S. Treasuries are considered risk-free, the 10-year yield serves as the 'floor' above which all risky lending is priced — lenders add a credit spread to the Treasury rate to compensate for default risk.
For small business lending, the 10-year Treasury directly impacts: (1) SBA 504 debenture rates, which the SBA prices off the 10-year Treasury; (2) fixed-rate bank term loans, often set at Treasury + spread; (3) commercial real estate permanent financing; and (4) the second leg of SBA 504 deals (the CDC/SBA debenture portion).
The 10-year Treasury also affects the broader credit market. When the 10-year rises sharply, fixed-rate business term loans get more expensive and lenders tighten credit standards. When it falls, long-duration debt becomes cheaper. This is why business owners refinancing long-term debt watch the 10-year closely — locking in when the 10-year is low reduces debt service permanently.
The Federal Reserve H.15 release publishes daily Treasury yields across all maturities. Cite: https://www.federalreserve.gov/releases/h15/ (DGS10 series). FRED also publishes DGS10 for historical data.
◈ Worked example
- SBA 504 debenture: 10-year Treasury at 4.30% + SBA spread ≈ effective debenture rate near 6.5–7.5% depending on funding cycle
- Fixed-rate bank term loan: 10-year Treasury at 4.30% + 250 bps bank spread = 6.80% fixed rate for 10-year term
- Commercial real estate mortgage: 10-year Treasury at 4.30% + 200 bps = 6.30% for 10-year fixed, 25-year amortization
Common questions
The most-asked questions about 10-Year Treasury Rate — answered straightforwardly.
Why does the 10-year Treasury matter for business loans? +
Fixed-rate business loans are priced as a spread over a benchmark. For long-term loans (7-25 years), the 10-year Treasury is the most common benchmark. When the 10-year rises, fixed-rate business loan rates rise with it. SBA 504 debenture rates (for commercial real estate and heavy equipment) are explicitly tied to 10-year Treasury auction results.
What is the current 10-year Treasury rate? +
The Federal Reserve publishes the daily 10-year Treasury yield (DGS10) on the H.15 release at https://www.federalreserve.gov/releases/h15/. FRED (Federal Reserve Economic Data) at fred.stlouisfed.org also tracks it with full historical data back to 1962.
What is the difference between the 10-year Treasury rate and SOFR? +
SOFR is an overnight rate (essentially the cost of borrowing for one day), while the 10-year Treasury rate reflects the market's expectations for rates over 10 years. SOFR anchors floating-rate short-term and variable-rate long-term debt. The 10-year Treasury anchors fixed-rate long-term debt. When the two diverge significantly (as in an inverted yield curve), it signals market stress.
Further reading
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https://clearvaluelending.com/glossary/10-year-treasury-rate