Mortgage REITs yield over 10% but face pressure as interest rate spreads hit a one-year low.

Six mortgage REITs offer yields above 10%, but their dividends are at risk due to a narrowing spread between short-term borrowing costs and long-term asset yields, which recently hit a one-year low. This spread compression threatens the net interest margin that supports their high payouts, especially as these REITs use high leverage. Companies like Dynex Capital, ARMOUR Residential, and Orchid Island Capital show varying degrees of dividend coverage and risk, with some already cutting payouts or facing potential cuts. Investors should focus on dividend coverage, book value, hedge protection, and management commentary rather than just the headline yields, as dividend cuts typically lead to share price declines.

ARMOUR Residential REIT (ARR) offers a striking dividend yield of 19.38% on Pluang, highlighting the appeal of mortgage REITs despite risks discussed in the news. As of September 18, 2026, ARR trades at USD 14.81 with a slight 0.34% decline in one day, and the platform shows strong investor interest with 88% of orders to buy. This high yield contrasts with the narrowing spread between borrowing costs and asset yields that threatens dividend stability, underscoring the complex risk-reward balance for investors.