Data as of Aug 21, 2026.

You are one of the lenders behind a large pool of mortgages. Every month you get a slice of the interest plus a slice of the principal being repaid — so the balance you have lent keeps shrinking, at a speed you cannot control.

Three things to know before you read a number in this table. Each row is a published series, not a bond for sale — several of these are averages across hundreds of bonds, and an average is not a price anyone will fill you at. The Basis column says what each row measures, and rows measured differently are not comparable with one another however close the numbers look. And the Observed column dates the reading: NOT CURRENT means the publisher is overdue and the figure shown is the last one they released, not today's. The note under the table says which rows belong to this category and which are here only as a benchmark to measure it against.

The Freddie Mac Primary Mortgage Market Survey rates (via FRED) are what borrowers pay, not what an MBS yields — do not read them as an investor's return. They matter here because they set the coupon on newly created loans and largely determine whether existing borrowers refinance. The 10-year constant-maturity Treasury yield is shown as the benchmark both are priced off. We carry no agency MBS index yield, so no figure on this page is the yield of a mortgage bond.

Why this section sits between the rates and the risks rather than at the end: two bonds quoting the same number do not pay you the same amount. Bond interest is generally taxed as ordinary income federally, at your own marginal rate, and what differs between the families is whether your state also taxes it and whether any federal exemption applies. A headline yield is a before-tax figure everywhere on this site, so the comparison that matters to you is the one made after the paragraphs below.

A fund is how most people end up owning this category, and it is not the same instrument as the bonds inside it. The yield column here counts the cash already paid out over the last year against today's share price, so it describes what has happened rather than what the holdings are contracted to earn — the two can differ by a wide margin in either direction. The other difference is the one people notice late: an individual bond has a date on which it repays, and a fund does not. It keeps selling and rebuying, so there is no maturity to wait for if the price falls.

Most people arrive at bonds expecting the only question to be whether the borrower pays. The list below is the answer to a different question: the ways the money shrinks while every payment arrives exactly on schedule. Prices fall when new bonds pay more than yours, inflation can outrun a fixed payment, and a borrower who repays early hands the cash back at the worst moment to reinvest it. Read these before the yield, not after it.

• Prepayment riskWhen rates fall, borrowers refinance and hand your principal back early. You then reinvest into the lower rates that caused the refinancing — the good scenario for a normal bond is the bad one here.
• Extension riskWhen rates rise, refinancing stops and people stay put. Your principal comes back more slowly than modelled, so the duration lengthens exactly when longer duration hurts most.
• Negative convexityThe combination of the two above. An MBS gains less in a rally than an equivalent Treasury and loses more in a sell-off, because the cash flows move against the holder in both directions.
• Interest-rate riskAll the usual duration risk sits underneath, with the added twist that the duration itself changes as rates move.
• Credit risk in non-agency dealsWithout an agency guarantee you own the borrowers' credit directly, subordinated to whichever tranches sit above you.
• Mistaking a distribution for a yieldA monthly cheque that includes principal is not the same as a coupon. Spending all of it spends part of the capital.