How the 10-year yield impacts your wallet

10-year Treasury hits all-time low

These volatile times have pushed down rates to historic lows, and that's good news for borrowers.

Nervous investors turn to bonds as a safe investment when the economic outlook is grim. Uncertainty surrounding global growth and the U.K.'s referendum vote has driven down the yield on the benchmark 10-year Treasury note to an all-time low on Tuesday. The yield on the 30-year Treasury bond also hit a fresh record low Wednesday.

Generally, when the demand for bonds increases, bond yields go down, as do interest rates, which follow. As a result, "this will offer an opportunity for people who are borrowing money for mortgages or automobiles," said Ric Edelman, an independent financial planner. "It's the silver lining of historically low Treasury yields."

US 10-year yield in past 3 monthsSource: FactSet

A win for borrowers

The correlation between Treasury yields and fixed mortgage rates is stronger than any other consumer product, said Greg McBride, chief financial analyst and senior vice president at

"Mortgage rates have been falling since the Brexit vote," McBride said. "Any time there is fear or uncertainty in the financial markets, mortgage shoppers are the beneficiaries."

Most Americans' largest liability is their home mortgage. Currently, mortgage rates are near the lowest levels ever with the average 30-year fixed rate at around 3.6 percent the lowest in three years and only one-tenth of a percentage point above the record low, according to Bankrate.

"We are already receiving notices from mortgage lenders touting lower mortgage rates trying to drum up refinance business," said Edelman. His advice to borrowers: "Act quickly."

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There is also a loose correlation between low Treasury yields and auto rates. "The rates being offered today, particularly by large national banks and credit unions, are some of the lowest ever seen," McBride said.

In turn, borrowing money to buy a car has reached record levels with $1 trillion in auto loans now outstanding. The national average for a 48-month new car loan is currently 4.14 percent, according to Bankrate.

More pain for savers

Other types of borrowing, however, including credit cards, small business loans and home equity lines of credit, are predominantly pegged to the federal funds rate and rise or fall in step with Federal Reserve's rate moves, which are in a holding pattern.

After the Brexit vote, fed funds futures markets showed almost no chance that the Fed would be raising rates this year. "The uncertainty in financial markets keeps the Fed on the sidelines," McBride said.

Another group that does not stand to benefit from historic low yields are savers, Edelman said.

"It's not good for savers, they are already earning zero-point-nothing in their bank accounts and this will exasperate that problem." The average rate on a savings account is only about 0.08 percent right now, according to Bankrate — less than the rate of inflation.