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Tech And Deathcare: A New Challenge To An Old Industry

Tech And Deathcare: A New Challenge To An Old Industry

Forbes09-06-2025
Aurelie Biehler, Founder & CEO, Memoria
A new tech-driven disruption is underway in a century-old, $100 billion industry that may become as outdated as DVD rentals – deathcare.
Uber redefined the transportation industry by leveraging technology to connect riders with drivers. Netflix disrupted the entertainment industry by transitioning from physical DVD rentals to online streaming. Airbnb transformed the hospitality industry by allowing individuals to rent out their properties to travelers. Each company became category leaders by using technology to remake the landscapes of their industries.
While the US funeral market is projected to grow to approximately $52 billion in the next five years, this industry remains low tech and fragmented. Most families have little idea what to do when a loved one passes and most of the steps that follow are offline, confusing, and emotionally draining. Many funeral homes demand that business be done in person, and online services are fragmented and focused on specific aspects of the bereavement process such as purchasing a casket or flowers.
Today, however, families have a new source of support: digital, transparent platforms that give families control during one of life's most difficult moments and are beginning to redefine leadership and purpose in the funeral industry.
Memoria is a company founded in 2022 by Aurelie Biehler after losing her grandfather and watching friends and relatives who lost loved ones during the pandemic. With a background in tech and finance, including roles in investment banking at Morgan Stanley and AI consulting at IBM for Fortune 500 companies, Biehler is bringing a new perspective to an industry that will be facing significant change in the years ahead.
'At Memoria, we believe people shouldn't be forced into overpriced packages that don't reflect who their loved one truly was. They deserve options that honor life meaningfully, with transparent pricing, fast delivery, and a support team that genuinely cares', said Biehler.
Memoria's platform guides families through the end-of-life process from the comfort of their home. At each step, the technology explains available options, making a traditionally complex process simple and clear. Customers select what they need, check out in one seamless transaction, and their team handles the rest, coordinating everything behind the scenes. It's a fully integrated, end-to-end experience that brings transparency, control, and ease to one of life's most difficult moments.
Biehler and her team spent the first year laying the groundwork by refining the product-market fit and launching a pilot. 'In 2023, we secured early funding, including from Mount Sinai Health System's Elementa Labs, and began generating revenue. By 2024, we had $1M in ARR, built a lean U.S.-based operation, and expanded our platform beyond product sales to include value-added services for families.'
Memoria is now focused on expanding into services like cremation and memorial planning, operational efficiency, and strengthening its position as a modern alternative to the traditional funeral industry. Families can order caskets and urns with next-day delivery, create obituaries with features like memory sharing, service details, and direct donations to charity or the bereaved family to help cover funeral expenses.
Since launching in January 2023, Memoria has serviced more than 4,500 families but getting the platform up and running has not been without its challenges. 'In our first year, we built a beautifully designed, interactive checklist—something everyone said they wanted to help navigate what to do when someone dies. But once it launched, no one was using it,' said Biehler. 'The following year, our focus shifted to scaling operations—and we learned the hard way how difficult it is to find reliable partners who can match our pace and handle the urgency of next-day funeral deliveries.'
Most recently, the company's biggest challenge has been navigating regulation and determining how to responsibly expand into services like cremation and memorial coordination. 'Each phase has tested a different part of the business, and of me as a founder, but it's also sharpened our understanding of what families really need,' said Biehler.
In recent years, there has been a growing recognition that positive social and environmental impacts of business contribute to purchasing decisions. Surprisingly, however, one industry that may not immediately come to mind when discussing impact is the funeral sector. Recognizing this, Memoria is engaging the next generation of consumers for whom profit and purpose are increasingly influencing purchasing decisions.
'From a social standpoint, fascinating research shows that funerals designed in the image of a loved one can lead to healthier and more complete grieving processes, compared to those based on standardized packages,' said Biehler. 'That's why, at Memoria, we place choice at the center of every customer experience. We're also excited to see growing public interest in sustainable options like natural burials, aquamation, and human composting—but we're also careful to examine the potential consequences, such as the risk of soil and groundwater contamination in certain natural burial settings, to ensure families can make informed and responsible decisions.'
Deathcare is one of the last major industries to avoid being disrupted by consumer tech and Memoria may well become the next Uber or Netflix.
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Palo Alto Networks Reports Fiscal Fourth Quarter and Fiscal Year 2025 Financial Results
Palo Alto Networks Reports Fiscal Fourth Quarter and Fiscal Year 2025 Financial Results

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Palo Alto Networks Reports Fiscal Fourth Quarter and Fiscal Year 2025 Financial Results

Fiscal fourth quarter revenue grew 16% year over year to $2.5 billion. Fiscal year 2025 revenue grew 15% year over year to $9.2 billion. Next-Generation Security ARR grew 32% year over year to $5.6 billion. Remaining performance obligation grew 24% year over year to $15.8 billion. SANTA CLARA, Calif., Aug. 18, 2025 /PRNewswire/ -- Palo Alto Networks® (NASDAQ: PANW), the global cybersecurity leader, announced today financial results for its fiscal fourth quarter and fiscal year, ended July 31, 2025. Total revenue for the fiscal fourth quarter 2025 grew 16% year over year to $2.5 billion, compared with total revenue of $2.2 billion for the fiscal fourth quarter 2024. GAAP net income for the fiscal fourth quarter 2025 was $253.8 million, or $0.36 per diluted share, compared with GAAP net income of $357.7 million, or $0.51 per diluted share, for the fiscal fourth quarter 2024. Non-GAAP net income for the fiscal fourth quarter 2025 was $673.0 million, or $0.95 per diluted share, compared with non-GAAP net income of $522.2 million, or $0.75 per diluted share, for the fiscal fourth quarter 2024. A reconciliation between GAAP and non-GAAP information is contained in the tables below. "Our strong execution in Q4 reflects a fundamental market shift in which customers understand that a fragmented defense is no defense at all against modern threats. They are partnering with us because our platforms are designed to work in concert, creating powerful operational synergies that deliver superior, near real-time outcomes and the efficiency our customers need," said Nikesh Arora, chairman and CEO of Palo Alto Networks. "We exited fiscal year 2025 with an acceleration in RPO, and surpassed the $10 billion revenue run-rate milestone, positioning ourselves well for sustained growth ahead." "Our strong top-line results were complemented by continued operating efficiency and strong free cash flow generation, making us a 'Rule-of-50' company for the fifth consecutive year," said Dipak Golechha, chief financial officer of Palo Alto Networks. "We are excited to carry this momentum into fiscal year 2026, where we will continue to execute against our profitable growth framework." Financial Outlook Palo Alto Networks provides guidance based on current market conditions and expectations. For the fiscal first quarter 2026, we expect: Next-Generation Security ARR of $5.82 billion to $5.84 billion, representing year-over-year growth of 29%. Remaining performance obligation of $15.4 billion to $15.5 billion, representing year-over-year growth of 23%. Total revenue in the range of $2.45 billion to $2.47 billion, representing year-over-year growth of 15%. Diluted non-GAAP net income per share in the range of $0.88 to $0.90, using 709 million to 712 million shares outstanding. For the fiscal year 2026, we expect: Next-Generation Security ARR of $7.00 billion to $7.10 billion, representing year-over-year growth of between 26% and 27%. Remaining performance obligation of $18.6 billion to $18.7 billion, representing year-over-year growth of between 17% and 18%. Total revenue in the range of $10.475 billion to $10.525 billion, representing year-over-year growth of 14%. Non-GAAP operating margin in the range of 29.2% to 29.7%. Diluted non-GAAP net income per share in the range of $3.75 to $3.85, using 710 million to 716 million shares outstanding. Adjusted free cash flow margin in the range of 38.0% to 39.0%. Guidance for non-GAAP financial measures excludes share-based compensation-related charges, including share-based payroll tax expense, acquisition-related costs, including change in fair value of contingent consideration liability, amortization expense of acquired intangible assets, litigation-related charges, including legal settlements, non-cash charges related to convertible notes, and income tax and other tax adjustments related to our long-term non-GAAP effective tax rate, along with certain non-recurring expenses and certain non-recurring cash flows. We have not reconciled non-GAAP operating margin guidance to GAAP operating margin, diluted non-GAAP net income per share guidance to GAAP net income per diluted share or adjusted free cash flow margin guidance to GAAP net cash from operating activities because we do not provide guidance on GAAP operating margin, GAAP net income or net cash from operating activities and would not be able to present the various reconciling cash and non-cash items between GAAP and non-GAAP financial measures because certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted, including share-based compensation expense, without unreasonable effort. The actual amounts of such reconciling items will have a significant impact on the company's GAAP net income per diluted share and GAAP net cash from operating activities. Earnings Call Information Palo Alto Networks will host a video webcast for analysts and investors to discuss the company's fiscal fourth quarter and fiscal year 2025 results as well as the outlook for its fiscal first quarter and fiscal year 2026 today at 4:30 p.m. Eastern time/1:30 p.m. Pacific time. Open to the public, investors may access the webcast, supplemental financial information and earnings slides from the "Investors" section of the company's website at A replay will be available three hours after the conclusion of the webcast and archived for one year. Forward-Looking Statements This press release contains forward-looking statements that involve risks, uncertainties, and assumptions including, without limitation, statements regarding our platformization strategy and related progress and opportunities, expectations regarding annual recurring revenue, remaining performance obligation, product development strategy and expectations regarding artificial intelligence (AI), and financial outlook for the fiscal first quarter 2026 and fiscal year 2026, mid- and long-term financial expectations. We use words such as "anticipates," "believes," "continue," "estimate," "expects," "future," "intends," "may," "plan," and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results could differ materially for a variety of reasons that are beyond our control and changing rapidly. There are a significant number of factors that could cause actual results to differ materially from forward-looking statements made or implied in this press release, including: developments and changes in general or worldwide market, geopolitical, economic, and business conditions; failure of our platformization product offerings; failure to successfully integrate acquisitions or achieve the expected benefits of our strategic partnerships and acquisitions, including the proposed transaction with CyberArk Software Ltd. ("CyberArk"); changes in the fair value of our contingent consideration liability associated with acquisitions; the risk that the conditions to the proposed transaction with CyberArk are not satisfied on a timely basis, or at all, or the failure of the proposed transaction with CyberArk to close for any other reason or to close on the anticipated terms; significant and/or unanticipated difficulties, liabilities or expenditures relating to the transaction with CyberArk; the effect of the announcement, pendency or completion of the proposed transaction with CyberArk on our and CyberArk's business and our common share price or CyberArk's ordinary share price; risks related to disruption of management time from ongoing business operations due to the proposed transaction with CyberArk; the outcome of any legal proceedings that may be instituted against us, CyberArk or our respective directors; risks associated with managing our growth; risks associated with new product, subscription and support offerings, including our product offerings that leverage AI; shifts in priorities or delays in the development or release of new product or subscription or other offerings, or the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products, subscriptions and support offerings; failure of our business strategies; rapidly evolving technological developments in the market for security products, subscriptions and support offerings; defects, errors, or vulnerabilities in our products, subscriptions or support offerings; our customers' purchasing decisions and the length of sales cycles; our competition; our ability to attract and retain new customers; our ability to acquire and integrate other companies, products, or technologies in a successful manner; our debt repayment obligations; and our share repurchase program, which may not be fully consummated or enhance shareholder value, and any share repurchases which could affect the price of our common stock. For additional risks and uncertainties on these and other factors that could affect our financial results and cause actual results to differ materially from those described in the forward-looking statements we make in this press release are included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in our Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission ("SEC") on May 21, 2025, which is available on our website at and on the SEC's website at Additional information will also be set forth in other documents that we file with or furnish to the SEC from time to time. All forward-looking statements in this press release are based on our current beliefs and information available to management as of the date hereof and are inherently uncertain, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. Non-GAAP Financial Measures and Other Key Metrics Palo Alto Networks has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The company uses these non-GAAP financial measures and other key metrics internally in analyzing its financial results and believes that the use of these non-GAAP financial measures and key metrics are helpful to investors as an additional tool to evaluate ongoing operating results and trends, and in comparing the company's financial results with other companies in its industry, many of which present similar non-GAAP financial measures or key metrics. The presentation of these non-GAAP financial measures and key metrics are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. A reconciliation of the company's historical non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations. Non-GAAP net income and net income per share, diluted. Palo Alto Networks defines non-GAAP net income as net income plus share-based compensation-related charges, including share-based payroll tax expense, acquisition-related costs, including change in fair value of contingent consideration liability, amortization expense of acquired intangible assets, litigation-related charges, including legal settlements, and non-cash charges related to convertible notes. The company also excludes from non-GAAP net income tax adjustments related to our long-term non-GAAP effective tax rate in order to provide a complete picture of the company's recurring core business operating results. The company defines non-GAAP net income per share, diluted, as non-GAAP net income divided by the weighted-average diluted shares outstanding, which includes the potentially dilutive effect of the company's employee equity incentive plan awards and the company's convertible senior notes and related warrants, after giving effect to the anti-dilutive impact of the company's note hedge agreements, which reduced the potential economic dilution that otherwise would have occurred in connection with the conversion and settlement of the company's convertible senior notes. Under GAAP, the anti-dilutive impact of the note hedge is not reflected in diluted shares outstanding. The company considers these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that it uses non-GAAP operating margin. Next-Generation Security ARR. Palo Alto Networks defines Next-Generation Security ARR as the annualized allocated revenue of all active contracts as of the final day of the reporting period related to all product, subscription and support offerings, excluding revenue from hardware products, and legacy attached subscriptions, support offerings and professional services. The company considers Next-Generation Security ARR to be a useful operating metric for management and investors to assess the performance of the company because Next-Generation Security is where the company has focused its innovation and the company expects its overall revenue to be disproportionately driven by this Next-Generation Security portfolio. Because Next-Generation Security ARR does not have the effect of providing a numerical measure that is different from any comparable GAAP measure, the company does not consider it a non-GAAP measure. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures and key metrics as analytical tools. Many of the adjustments to the company's GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in the company's financial results for the foreseeable future, such as share-based compensation, which is an important part of Palo Alto Networks' employees' compensation and impacts their performance. Furthermore, these non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP, and the components that Palo Alto Networks excludes in its calculation of non-GAAP financial measures may differ from the components that its peer companies exclude when they report their non-GAAP results of operations. Palo Alto Networks compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures. In the future, the company may also exclude non-recurring expenses and other expenses that do not reflect the company's core business operating results. About Palo Alto Networks As the global AI and cybersecurity leader, Palo Alto Networks (NASDAQ: PANW) is dedicated to protecting our digital way of life via continuous innovation. Trusted by more than 70,000 organizations worldwide, we provide comprehensive AI-powered security solutions across network, cloud, and security operations, enhanced by the expertise and threat intelligence of Unit 42®. Our focus on platformization allows enterprises to streamline security at scale, ensuring protection fuels innovation. Explore more at Palo Alto Networks and the Palo Alto Networks logo are trademarks of Palo Alto Networks, Inc. in the United States or in certain jurisdictions throughout the world. All other trademarks, trade names, or service marks used or mentioned herein belong to their respective owners. Any unreleased services or features (and any services or features not generally available to customers) referenced in this or other press releases or public statements are not currently available (or are not yet generally available to customers) and may not be delivered when expected or at all. Customers who purchase Palo Alto Networks applications should make their purchase decisions based on services and features currently generally available. Palo Alto Networks, Inc. Preliminary Condensed Consolidated Statements of Operations (In millions, except per share data) (Unaudited) ‌ Three Months EndedYear EndedJuly 31,July 31,2025202420252024 Revenue:Product $ 573.9$ 480.5$ 1,801.9$ 1,603.3 Subscription and support 1,962.41,709.07,419.66,424.2 Total revenue 2,536.32,189.59,221.58,027.5 Cost of revenue:Product 136.2104.7413.2348.2 Subscription and support 542.8469.02,038.41,711.0 Total cost of revenue 679.0573.72,451.62,059.2 Total gross profit 1,857.31,615.86,769.95,968.3 Operating expenses:Research and development 503.5494.81,984.11,809.4 Sales and marketing 829.3742.33,100.22,794.5 General and administrative 27.3140.3442.7680.5 Total operating expenses 1,360.11,377.45,527.05,284.4 Operating income 497.2238.41,242.9683.9 Interest expense (0.2)(0.3)(3.0)(8.3) Other income, net 94.880.9355.8312.7 Income before income taxes 591.8319.01,595.7988.3 Provision for (benefit from) income taxes 338.0(38.7)461.8(1,589.3) Net income $ 253.8$ 357.7$ 1,133.9$ 2,577.6 ‌Net income per share, basic $ 0.38$ 0.55$ 1.71$ 4.04 Net income per share, diluted $ 0.36$ 0.51$ 1.60$ 3.64 ‌Weighted-average shares used to compute net income per share, basic 669.4648.8662.5638.5 Weighted-average shares used to compute net income per share, diluted 709.0707.8709.3707.9 Palo Alto Networks, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (In millions, except per share amounts) (Unaudited) ‌Three Months EndedYear EndedJuly 31,July 31,2025202420252024 GAAP net income $ 253.8$ 357.7$ 1,133.9$ 2,577.6 Share-based compensation-related charges 372.7287.11,386.41,161.7 Acquisition-related costs(1) (141.8)3.5(109.7)13.6 Amortization expense of acquired intangible assets 36.933.7164.0119.0 Litigation-related charges(2) 3.225.6(31.7)211.5 Non-cash charges related to convertible notes(3) 0.10.61.13.5 Income tax and other tax adjustments(4) 148.1(186.0)(199.5)(2,138.8) Non-GAAP net income $ 673.0$ 522.2$ 2,344.5$ 1,948.1 ‌GAAP net income per share, diluted $ 0.36$ 0.51$ 1.60$ 3.64 Share-based compensation-related charges 0.530.411.981.73 Acquisition-related costs(1) (0.20)0.00(0.15)0.02 Amortization expense of acquired intangible assets 0.050.050.230.17 Litigation-related charges(2) 0.000.04(0.04)0.30 Non-cash charges related to convertible notes(3) 0.000.000.000.00 Income tax and other tax adjustments(4) 0.21(0.26)(0.28)(3.02) Non-GAAP net income per share, diluted $ 0.95$ 0.75$ 3.34$ 2.84 ‌GAAP weighted-average shares used to compute net income per share, diluted 709.0707.8709.3707.9 Weighted-average anti-dilutive impact of note hedge agreements (2.1)(14.7)(7.3)(20.7) Non-GAAP weighted-average shares used to compute net income per share, diluted 706.9693.1702.0687.2 (1) Consists of acquisition transaction costs, share-based compensation related to the cash settlement of certain equity awards, change in fair value of contingent consideration liability, and costs to terminate certain employment, operating lease, and other contracts of the acquired companies. (2) Consists of the amortization of intellectual property licenses and covenant not to sue, and a legal contingency charge (credit). During the three months and fiscal year ended July 31, 2024, it also includes a litigation settlement charge. (3) Consists of non-cash interest expense for amortization of debt issuance costs related to the company's convertible senior notes. (4) Consists of income tax adjustments related to our long-term non-GAAP effective tax rate. During the three months and fiscal year ended July 31, 2025, it included a one-time deferred tax provision adjustment relating to the enactment of One Big Beautiful Bill. During the three months and fiscal year ended July 31, 2024, it included a tax benefit from a release of our valuation allowance on U.S. federal, U.S. states other than California, and United Kingdom deferred tax assets. Palo Alto Networks, Inc. Preliminary Condensed Consolidated Balance Sheets (In millions) ‌July 31, 2025July 31, 2024(unaudited) AssetsCurrent assets: Cash and cash equivalents $ 2,268.6$ 1,535.2 Short-term investments 634.61,043.6 Accounts receivable, net 2,965.02,618.6 Short-term financing receivables, net 714.6725.9 Short-term deferred contract costs 419.5369.0 Prepaid expenses and other current assets 520.5557.4 Total current assets 7,522.86,849.7 Property and equipment, net 387.3361.1 Operating lease right-of-use assets 347.0385.9 Long-term investments 5,555.64,173.2 Long-term financing receivables, net 1,002.31,182.1 Long-term deferred contract costs 585.9562.0 Goodwill 4,566.63,350.1 Intangible assets, net 762.7374.9 Deferred tax assets 2,424.22,399.0 Other assets 421.8352.9 Total assets $ 23,576.2$ 19,990.9 Liabilities and stockholders' equityCurrent liabilities: Accounts payable $ 232.2$ 116.3 Accrued compensation 607.6554.7 Accrued and other liabilities 846.0506.7 Deferred revenue 6,302.25,541.1 Convertible senior notes, net —963.9 Total current liabilities 7,988.07,682.7 Long-term deferred revenue 6,449.75,939.4 Deferred tax liabilities 89.1387.7 Long-term operating lease liabilities 338.2380.5 Other long-term liabilities 886.8430.9 Total liabilities 15,751.814,821.2 Stockholders' equity: Preferred stock —— Common stock and additional paid-in capital 5,291.93,821.1 Accumulated other comprehensive income (loss) 48.4(1.6) Retained earnings 2,484.11,350.2 Total stockholders' equity 7,824.45,169.7 Total liabilities and stockholders' equity $ 23,576.2$ 19,990.9 View original content to download multimedia: SOURCE Palo Alto Networks, Inc. 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Mortgage rate predictions for the next 5 years
Mortgage rate predictions for the next 5 years

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Mortgage rate predictions for the next 5 years

How long will mortgage rates remain in the mid- to upper-6% range? Mortgage interest rates are determined by many factors, a major one being the 10-year Treasury yield. At Yahoo Finance, we've designed a five-year mortgage rate forecast, built on a 10-year yield correlation, that provides some insight. This embedded content is not available in your region. Read more: The best mortgage lenders right now Mortgage rates are tuned to the government bond market Mortgage rate forecasts might best be derived from 10-year Treasury note trends. While the two rates often track in the same direction, there is a spread between them that we will account for below. First, let's understand where Treasury yields are headed in the next five years. We'll combine human analysis with data pulled from artificial intelligence to put together a prediction. Economists' 5-year forecast for Treasury rates Michael Wolf is a global economist at Deloitte Touche Tohmatsu Ltd. In June, the Deloitte Global Economics Research Center issued an updated U.S. economic forecast in which Wolf laid out the firm's Treasury yield expectations over the next five years. "We expect the 10-year Treasury yield to hover near 4.5% for the remainder of this year, despite a softening in economic data and a 50-basis-point cut from the Fed in the fourth quarter of 2025," he wrote. "The 10-year Treasury yield begins to decline slowly in 2026, falling to 4.1% by 2027 and remaining there through the end of 2029." Let's chart that forecast. That's not much movement. Goldman Sachs analysts agree, saying the 10-year Treasury will remain near 4.1% through 2027. Meanwhile, the Congressional Budget Office (CBO) forecasts the Treasury yield to be 4.1% by the end of 2025, down to 4% in 2026 and remaining near 3.9% through 2029. Dig deeper: When will mortgage rates go down? Up Next Up Next Estimating a 5-year spread As we mentioned up top, the 10-year Treasury and 30-year fixed mortgage rates are separated by a spread. That difference between the two has been on either side of 2.5 percentage points in recent years. That's a significant change when compared to the spread from 2010 to 2020 when it was under two percentage points — and often near 1.5. Using a 2.5 percentage point spread, here's an example of how Treasurys and mortgage rates compare: 10-year Treasury rate = 4% Spread = 2.5 percentage points Mortgage rates = 6.5% Here's a recent example: On Aug. 14, 2025, the 10-year Treasury yield was 4.23%, and the 30-year fixed mortgage rate was 6.63%. The spread was 6.58 - 4.29 = 2.29 percentage points. The latest version of artificial intelligence, GPT-5, suggested using a spread of 2.1 to 2.3 percentage points. Here is its rationale: Historical standard (2010s): ~1.7 pp Recent years (2022 to 2025): ~2.6 pp Estimated 5-year average spread: ~2.1 to 2.3 percentage points Using these spread estimates, we can now complete our five-year mortgage rate forecast. Read more: How to get the lowest mortgage rate possible The 5-year mortgage rate forecast Using the Treasury forecast from above, we add the spread between the bond market and 30-year fixed mortgage rates to compile a five-year forecast: Learn more: When will mortgage rates go back down to 6%? The margin of error Of course, these are long-range estimates based on historical norms and broad expectations. All of these numbers could be thrown out the window if any of the following happens: 10-year Treasurys outperform or underperform the forecast. For example, yields could crash in a severe economic setback, such as a recession. The spread between Treasurys and mortgage rates narrows — or dramatically expands. Monetary policy, as driven by the Federal Reserve, substantially changes. Mortgage rate predictions for the next five years FAQs Will we ever see a 3% mortgage rate again? There is no forecast that predicts a 3% mortgage rate in the next five years. However, who saw such low home loan rates on the horizon in 2007 when rates were about where they are now? Things like the Great Recession and a global pandemic are rarely on the radar, and such black swan events are what it takes to move mortgage rates into the cellar. Will mortgage rates drop in the next five years? Based on the estimates above, rates are not expected to drop significantly in the next five years. However, a recession or other unknown disruption to the economy (such as a financial collapse or pandemic) could change the outlook. Is it better to fix a rate for two or five years? If you are considering an adjustable-rate mortgage with an initial fixed-rate period, you'll first want to consider how long you'll actually remain in the house you are financing. Then the long-term mortgage rate forecasting begins. The best idea is probably to choose the initial term that best fits your current budget. What will mortgage rates be in 2027? The analysis above predicts 2027 mortgage rates to be around 6.2% to 6.4%. Laura Grace Tarpley edited this article.

What a credit-builder loan is and how it works
What a credit-builder loan is and how it works

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What a credit-builder loan is and how it works

Key takeaways A credit-builder loan expects you to make scheduled payments first and receive the loan balance at the end and is specifically designed to build your credit history. Credit-builder loans are ideal for the 28 million Americans who are credit invisible or those with thin credit files who need to establish payment history. Most credit-builder loans range from $300 to $1,000 with terms of 6 to 24 months, and your payments are reported to all three credit bureaus. Making on-time payments on a credit-builder loan can help you qualify for better rates on future credit products like mortgages, auto loans, and credit cards. A credit-builder loan has a reverse loan structure designed to help people with no credit or poor credit build a track record of on-time payments. Instead of receiving funds upfront, you make monthly payments that are reported to all three credit bureaus, and you get the money after the term ends. Once you have a credit score and established a positive payment history, you can apply for other credit products, such as credit cards, personal loans or a mortgage. Keep in mind credit scores are important and apply to your everyday life – landlords check them for apartments, insurers use them to set rates, and some employers even review them during hiring. How credit-builder loans work and improve credit scores Credit-builder loans are a type of credit-building product that typically range from $300 to $1,000, though some lenders offer up to $3,000. The lender deposits this amount into a secured savings account or certificate of deposit (CD) that earns interest while you make monthly payments over 6 to 24 months. You'll pay interest on the loan that ranges from 6 percent to 16 percent APR, and you may also have to pay an application fee ranging from $10 to $25. While you were making your payments, the lender reported your monthly payments to credit agencies, and over time, the payments helped boost a bad score or built a credit history if you didn't have a score. Bankrate's take: Payment history makes up 35% of your FICO score – the largest single factor – so consistent on-time payments through a credit-builder loan directly improve this crucial component. Learn more: What is a FICO score? For example, let's say you take out a $1,000 credit-builder loan at 7% interest for 24 months. Your monthly payment would be approximately $45. After making all 24 payments on time, you'd receive your $1,000 back (minus any fees), and you'd have established two years of positive payment history on your credit reports. Once you've made all the payments, you've built a satisfactory history with the lender and can access the full amount you borrowed. Some lenders may even return a portion of the interest as dividends, particularly credit unions. Credit-builder loans are not good as emergency funds It's important to note that if you need emergency funding, a credit-builder loan won't help. The funds are only released after you've completed all payments. For urgent needs, research emergency loan options instead, but avoid payday loans, which can charge predatory rates as high as 400% APR. Who are credit-builder loans for? People new to credit, like recent high school or college graduates, may benefit from a credit-builder loan to help develop a credit score. According to U.S. News research, 59% of credit-invisible consumers want to build their credit, but many don't know how or haven't tried. Taking out a credit-builder loan could also be a wise move if you fit into one of the following categories: Credit-invisible consumers If you're credit invisible, you don't have any reported credit history, so a credit-builder loan can help add a positive payment history to your reports so you can earn a credit score. According to Experian and consulting firm Oliver Wyman, over 28 million U.S. consumers don't have any credit history, representing about 11% of the adult population. The data also shows disparities by race for credit invisibility: 16 percent of Hispanic consumers 14 percent of Black consumers 10 percent of Asian consumers 9 percent of white consumers Thin-credit consumers A credit-builder loan could also help if you have a thin-credit profile, which means you don't have enough active credit history to generate a credit score. Once your payments are reported to the credit bureaus, it can beef up your credit file. In addition to the 28 million credit-invisible consumers, an additional 21 million Americans are 'unscorable.' These consumers have some experience with credit but not enough to generate a score. These groups represent nearly 50 million Americans who could benefit from credit-builder loans. Recent Consumer Financial Protection Bureau (CFPB) data corrections reveal an even broader market for credit-builder loans. While the credit invisible population is estimated at 7 million adults as of 2020, there are an additional 25.3 million adults with unscored credit records. This means over 32 million Americans could benefit from credit-builder loans. More people who could benefit from credit-builder loans The CFPB also showed that an additional 5.9 percent have 'stale' credit, or no recent activity, and 3.9 percent have insufficient information to generate a score. Where to find credit-builder loans You can get a credit-builder loan from several places. When shopping, look for lenders that report to the three major credit bureaus to maximize your credit-building impact: Credit unions: Credit unions often offer lower rates than some larger banks since they are member-owned, not-for-profit institutions. You must become a credit union member before borrowing. Many credit unions offer credit-builder loans in the 5% to 10% APR range. Small banks: You're less likely to find a credit-builder loan at national, big-name banks, but your community or regional bank may offer this product. Community banks often have more flexible underwriting and may work with you if you have banking history with them. Community Development Financial Institutions (CDFIs): These institutions, which include banks, credit unions and nonprofit funds, specialize in doing business with borrowers in underserved communities and low-income areas. There are about 1,400 CDFIs in the U.S., and you can find them through the CDFI Fund website. Online lenders: Some online lenders offer credit-builder loans with loan terms as long as 48 months. Popular options include Self, Chime, and MoneyLion, though not all are available in every state. Benefits and disadvantages to credit-builder loans While credit-builder loans can be powerful tools for establishing credit, they come with both advantages and potential drawbacks to consider: Benefits No credit check required for most lenders Forced savings component helps you build an emergency fund Lower risk than traditional credit cards for building credit Fixed monthly payments help establish budgeting discipline Some lenders return interest as dividends Disadvantages No access to funds until loan completion Interest costs (around 6% to 16% APR) mean you pay to build credit Application fees and administrative costs Missing payments damage your credit Not helpful for emergency expenses Best bad credit loans Want to check out the rates lenders are offering to people with less than ideal credit? Check out the latest rates lenders are offering. Check rates and lenders now How to get a credit-builder loan in 6 steps Getting a credit-builder loan is relatively easy. There are typically no credit checks involved, and you could get your account set up the same day you apply. That said, there are still a few steps to follow for you to get the most out of your loan. 1. Review your monthly budget Don't take on a new monthly payment unless you've checked your monthly spending. Remember, you don't receive any funds up front with a credit-builder loan. Start with a small loan amount to ensure you can afford the payment and avoid a situation where you can't repay the balance. A good rule of thumb to follow: your credit-builder loan payment shouldn't exceed 5% of your monthly income. 2. Check your credit history Although credit-builder loan eligibility criteria aren't as focused on your credit scores, checking your credit history for any issues affecting your approval is a good idea. You can get a free weekly copy of your credit reports from Experian, TransUnion and Equifax by visiting Disputes may take up to 30 days to be addressed, so be sure to give yourself ample time between reviewing your report and applying. 3. Compare your options It's always best to shop around before you choose a credit-builder loan. Pay attention to the following when comparing lenders: Loan amounts: Although the amounts vary from lender to lender, most credit-builder loans are between $300 and $1,000. The more you borrow, the higher your payment will be, so starting with a smaller loan is best. Repayment terms: Credit-builder loan terms tend to be shorter, from 12 months to 36 months. The shorter your term, the higher your monthly payment, but the lower interest you'll pay overall. Flexibility: In general, you can't access credit-builder loan funds until you've made all the payments. However, some lenders may allow you to receive some of the balance after you've made a set number of payments. APRs and fees: Your monthly payment may not cover interest and fee charges. In such cases, those costs are deducted after you've made all of your scheduled payments, which can take a big chunk out of the funds you receive. 4. Gather all the necessary information Credit-builder lenders usually require the same documents needed for a personal loan. The requirements may vary among lenders, but usually include: A picture ID, like a driver's license or passport Your Social Security number and date of birth Your phone number, address, and email address Copies of paystubs, W-2s or tax returns to prove your income Employer contact information Your bank account number and routing number Proof of your monthly rent or mortgage payment 5. Apply Once you've chosen the credit-builder lender you want to do business with and have your documents ready, you'll fill out the lender's full application. The process is typically all done online, and you can upload your financial paperwork through a secure portal on the lender's website. At this point, the lender will perform a hard credit pull and make a decision. If you're approved, review the terms carefully and ask questions if you don't understand how much you'll pay each month, what the fees are or when you can access the loan funds. 6. Make payments and track your progress Once you sign your final documents, you'll begin making your monthly payments. Most credit-builder lenders set up automatic payments through your bank so you don't miss a payment. Missing even one payment can significantly damage the credit you're trying to build, so autopay is crucial. After you make payments for a few months, start tracking your credit score progress. Ask your lender if it offers a free credit monitoring service and enroll in it so you can keep watch for movement in your scores. You could start seeing improvement in your credit score within 3 to 6 months of on-time payments. 4 Alternatives for building credit A credit-builder loan isn't the only way to improve or build your credit score. There are many other credit-building options to consider, depending on your needs and timeline. Secured credit card: If you're looking for ways to build credit, a secured credit card can be a valuable option. These types of credit cards require that you establish a savings account with the credit card issuer and maintain a certain balance. These funds act as security for the line of credit. According to U.S. News, 27 percent of credit-invisible consumers have tried secured cards. Become an authorized user: If a parent, family member or spouse has a solid credit profile and a credit card account in good standing, ask if you can be added as an authorized user to the account. That individual's credit history will then be added to your credit profile. Make bill payments on time: If you simply have a low credit score that you're looking to improve, ensuring that you establish a consistent track record of paying all bills on time can help increase your score over time. Services like Experian Boost let you add utility, phone, and streaming payments to your credit file. Pay down existing debt: Yet another way to improve a low score is by focusing on paying down any existing debt you may have. Minimizing balances on credit cards and personal loans can go a long way toward improving a credit score. Credit experts generally recommend borrowing less than 30 percent of your available credit limits. Best personal loan rates Want to build your credit using personal loans rather than credit-builder loans? Check out the latest rates from the top personal loan lenders. Check lenders and rates now Frequently asked question Should you use a personal loan to build credit? If you qualify, using a traditional personal loan to build credit could be an excellent alternative if you need funds right away and can comfortably afford the monthly payments. Before you do this, though, consider potential downsides like high borrowing costs and more debt. Traditional personal loans typically require credit scores of 580 or higher, making them inaccessible to credit-invisible consumers who would benefit more from credit-builder loans. Sign in to access your portfolio

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