What a 5% 10-year Treasury actually means for a dentist, a restaurant owner and a landlord with a loan reset
The 10-year yield closed at 5% or higher on three days last week, the first time since 2007. For an owner whose building loan was fixed in 2021 and resets now, our worked example shows the payment rising about 38%. Here is the arithmetic.
The 10-year Treasury yield closed at 5.00% on September 15 and 5.01% on September 16 and 18, according to the Treasury Department's daily yield table. Treasury's own records show the last close at 5% or above was in July 2007. The yield came in slightly to 4.96% on Monday. Fortune put the move in context on Tuesday: the same yield bottomed near 0.5% in 2020.
Most coverage treats this as a stock market story or a mortgage story. For a business owner it matters most in one situation: you own your building, you borrowed against it at a fixed rate a few years ago, and the rate is about to reset.
The number behind the headline: the reset, not the rise
If your building loan was fixed for a term and reprices as a spread over a Treasury yield, the reset date is where this lands. Your loan documents say which index applies and what the spread is. Here is what the government's own table shows for the two Treasury benchmarks most likely to be in that clause:
| Treasury yield | Sept 22, 2021 | Sept 22, 2025 | Sept 21, 2026 |
|---|---|---|---|
| 5-year | 0.86% | 3.71% | 4.83% |
| 10-year | 1.32% | 4.15% | 4.96% |
A loan written in September 2021 and priced off the 5-year is repricing from a base of 0.86% to one of 4.83%. That is a jump of almost 4 percentage points, and it lands all at once on the reset date. For comparison, the Fed's September hike moved the prime rate by a quarter point, which we worked through for floating-rate borrowers this morning.
The dentist who owns the office: about $1,945 a month more
Take a $1,000,000 loan on a dental office, amortized over 25 years, priced at the 5-year Treasury plus 2.75 points. The 2.75-point spread is our illustrative assumption. Use the one in your own note.
- 2021 rate: 0.86% + 2.75% = 3.61%. Monthly payment: about $5,065.
- Balance after five years of payments: about $864,956.
- 2026 reset rate: 4.83% + 2.75% = 7.58%, over the remaining 20 years. Monthly payment: about $7,010.
That is about $1,945 a month, or roughly $23,340 a year, on a loan that is $135,000 smaller than it was. The payment rises about 38%. The CheckThisBiz directory lists 126,946 independent dental practices. Practices that own their space are the ones exposed here. Practices that lease feel it later, if at all, when the landlord refinances.
The restaurant that owns its building: $1,167 a month, set against sales
Same terms on a $600,000 building loan: the payment goes from about $3,039 to about $4,206, which is about $1,167 more a month. For a restaurant doing $100,000 a month in sales, that is a little over 1% of revenue gone to the bank before a single price changes. The directory lists 605,380 independent restaurants. The ones that bought their building on cheap 2021 money should find the reset date in the note now, not when the bank's letter arrives.
The small landlord: the payment is not the real problem
On a $2,000,000 loan on a small retail strip or mixed-use building, the same math takes annual debt service from about $121,570 to about $168,250. If the property nets $180,000 a year before debt, its debt service coverage ratio (net income divided by loan payments) falls from about 1.48 to about 1.07. If your loan agreement sets a minimum coverage ratio, check it now: at 1.07 there is very little room if a tenant leaves. For a landlord the risk is not only a bigger payment. It is that the bank renews for a smaller amount and asks for cash to cover the difference.
The owner buying a building now
A buyer who waited a year has paid for it. The 10-year sat at 4.15% a year ago and 4.96% on Monday. On an $800,000 loan over 25 years at a 2.5-point spread over the 10-year, that is about $5,477 a month at last year's base and about $5,891 at this week's, roughly $414 more. The buyer does not get it back unless yields fall.
What to actually do
- Find three things in your loan documents today: the reset or maturity date, the index (5-year Treasury, 10-year, prime or something else) and the spread. With those you can run the table above on your own numbers.
- Start renewal talks 90 to 180 days early. A landlord whose coverage ratio will fall below the covenant needs time to line up cash or new tenants, not a two-week window.
- Do not plan on yields coming back quickly. The median Fed official's September projection puts the policy rate at 4.1% at the end of both 2026 and 2027, meaning no cuts next year, and Tuesday's two-year auction cleared at the highest yield since May 2024. Waiting for a better rate is a bet, not a plan.
- If the reset is more than a year away, do nothing drastic yet. Existing fixed loans do not change until the reset date. Put the likely new payment in next year's budget and keep watching the 10-year chart.
- If you are buying, run the deal at the current yield plus a cushion, not at last year's.
Sources: U.S. Treasury daily par yield curve rates (2021, 2025, 2026 and 2007 data); Fortune; business counts from CheckThisBiz. Loan sizes, spreads, sales and property income are illustrative examples; payments are standard amortization math. This is general information, not financial advice.
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