“If interest rates rise, you should switch to a fixed rate immediately”—that is a decision made without knowing the 2.23% figure

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Every time I see the news that the Bank of Japan has raised interest rates, I get anxious, wondering, “Should I switch my home loan to a fixed rate soon?” Many people must feel this way.

On September 18, 2026, the Bank of Japan raised its policy interest rate from 1.00% to 1.25%. This is the highest level in about 31 years, since 1995. For those with variable-rate home loans, this is news that cannot be ignored.

However, there is one figure I want you to know here. According to MFS (Moge Check), a service that provides home loan refinancing, as of September 2026, variable interest rates are generally around 1.23%, while Flat 35 (35-year fixed) is 3.46%, a difference of 2.23%. This is the largest gap since the company began tracking in January 2018, and it is explained as being equivalent to nine Bank of Japan rate hikes. Simply put, the calculation is that “if the variable interest rate rises by 2.23% or more in the future and that state continues for 35 years, then a fixed interest rate would be more advantageous.”

“Whether you should switch to a fixed rate right now” is a problem that needs to be considered based on this figure, and if you judge it only by the feeling of “being vaguely anxious,” you might actually end up losing money. Moreover, the interest rate gap is not the only thing to judge. Refinancing also has a hurdle that is often overlooked: re-enrolling in group credit life insurance (danshin).

In this article, I will organize why so many people are being forced to make a decision at this timing, and summarize the materials for judging how to think about your own case.

※This article is general information based on reports and public information available as of September 2026. Please consult your financial institution or a financial planner for individual refinancing decisions.

Why are so many people worried about the timing of switching now?

The background includes the following movements.

The first is that the pace of interest rate hikes is accelerating.

Since lifting negative interest rates in March 2024, the Bank of Japan has been raising rates in stages, but since entering 2026, the intervals between rate hikes have shortened, with hikes in June and September. The market is also aware of the possibility that interest rate hikes will continue in the future.

The second is that fixed interest rates are also already continuing to rise.

Even if you think, “I’ll switch to a fixed rate while I can,” the fixed interest rate itself has already risen. Fixed interest rates have been raised at almost all major financial institutions through September 2026. In particular, interest rates for Flat 35 and 10-year fixed types continue to be raised at many financial institutions. The background is said to be that the yield on newly issued 10-year Japanese government bonds rose to around 2.93–2.95% at the end of August 2026, the highest level in about 30 years since around 1996. The situation is no longer as simple as “it’s safe if you switch to a fixed rate.”

The third is that more people are feeling anxious about the screening and the refinancing itself.

According to an announcement by Century 21 Housing Factory, which provides home loan consultation and refinancing support, the number of home loan-related consultations in the January–March 2026 quarter increased by approximately 34% compared to the same period last year. The increase is said to be centered on consultations such as “I’m worried about passing the preliminary screening” and “I want to consolidate multiple loans” against the backdrop of rising interest rates and high prices.

Three common misconceptions

Misconception 1: If interest rates rise, you should switch to a fixed rate immediately

This is incorrect. As mentioned above, there is already a difference of more than 2% between variable and fixed interest rates. Unless the variable interest rate rises enough to close this gap and that continues for a long period, switching to a fixed rate may actually increase your total payment amount. You need to think based on the specific interest rate gap and your remaining repayment period, not just the feeling of “being anxious because it went up.”

Misconception 2: If you switch to a fixed rate, you won’t have to worry about your home loan anymore

This is also incorrect. Refinancing to a fixed interest rate incurs various costs such as administrative fees and registration fees. In addition, group credit life insurance (danshin) must be canceled at the time of refinancing and re-enrolled at the new financial institution. Depending on your health condition at the time of refinancing, there are cases where you cannot pass the screening for this insurance and cannot refinance at all. The choice of “switching to a fixed rate because I’m anxious” does not always go as planned.

Misconception 3: It’s fine to stay with a variable rate because my current repayment amount won’t suddenly increase

This is not necessarily wrong either. Many variable-rate mortgage loans have mitigation measures (such as the 5-year rule and the 125% rule) to suppress sudden increases in repayment amounts, but these are mechanisms that only suppress the “appearance” of the repayment amount; they do not reduce the total amount of interest paid itself. Thinking that “it’s safe because my current repayment amount hasn’t changed” is premature.

Issues to clarify before making a decision

Many people are putting off the decision to switch while remaining in the following states.

Issue 1: Not grasping the specific interest rate difference between variable and fixed rates Even if there is a vague awareness that “fixed rates are somehow higher,” there are times when one has not calculated what the actual percentage difference is or how much of an interest rate rise is needed to bridge that gap.

Issue 2: Not specifically estimating the various costs involved in refinancing Even if one is considering refinancing to a fixed rate, there are times when a comparison of the total amount, including fees and various costs, has not been made.

Issue 3: Not checking the contract details of one’s own mortgage (presence or absence of the 5-year rule, etc.) There are times when one harbors vague anxiety without knowing that the presence or content of mitigation measures differs depending on the financial institution with which one has a contract.

Issue 4: Not understanding that there are several types of fixed rates, and that there are options other than fixed or variable One may think of “fixed rates” as a single category and fail to organize the differences between all-period fixed types and fixed-period selection types, or the fact that there are ways to combine both.

Issue 5: Not considering that the criteria for judgment change depending on the remaining repayment period Even though the magnitude of the impact of the same interest rate rise differs between those with a short remaining period and those with a long one, there are times when one is uniformly worried about “fixed or variable.”

Issue 6: Not checking risks specific to refinancing (such as re-examination for group credit life insurance) One may be so focused on the interest rate difference that one has not anticipated the possibility that the refinancing itself might not be approved.

If even one of these issues applies to you, you need to specifically organize your situation rather than making a decision based solely on a feeling of “vague anxiety.”