I think they will win La liga this season if they don't get by an injury crisis or something although they could choke, The CL i don't know. They are still very fragile on the back but now they are scoring a lot of golas, they have like 4goals/game average in the CL and 3,5/game average in La liga.
I see Mourinho spending one more year with Madrid, then moving either to comeback to one of his past teams ( Chelsea/ Inter) or to coach ( Man City/Man U)