[Thursday] Bank of Japan makes a surprise rate hike for the first time in 3 months. What I, with a 1.15% variable interest rate, am thinking about now

Hello. This is an account aiming for +1 million yen/year in dividends.

How did you spend your Silver Week holidays?
I was working, but two major developments occurred during this time.
I will start from here today with the review I promised. What has happened over these past 10 days

FOMC (Sept 15-16, USA)

The policy interest rate was raised by 0.25% to 3.75-4.00%. This was the first rate hike in about 3 years.
Although it was not much of a surprise to the market, it seems the content suggested one more rate hike before the end of the year.

Bank of Japan Monetary Policy Meeting (Sept 17-18, Japan)

This also raised the policy interest rate from 1.00% to 1.25%.
It was an additional rate hike at a fairly short interval of 3 months since the June meeting.

Today (Sept 24), the Tokyo market continued to rise after the holidays.

Following the strong rise in the US market during the holidays, led by semiconductor-related stocks, the Nikkei Stock Average closed at 65,513 yen, up 495 yen from the previous business day.
This is the fourth consecutive day of gains.
The exchange rate is also in the 158 yen per dollar range, with the yen weakening further.

My honest feelings

Until last week, I had viewed the news of “rate hike speculation” as something that happened to other people.
But when I learned that the Bank of Japan had actually raised rates to 1.25%, I took it personally for the first time.

Our home mortgage is at a variable interest rate of 1.15%.
Compared to the interest rate level at the time of the contract, the Bank of Japan’s policy interest rate has already exceeded it.
I understand that the interest rate applied to our home won’t change immediately, but I honestly have the feeling that “that day” is approaching.

When I did a rough calculation, I found that compared to when the interest rate was 0.65%,
my payments would increase by around 3 million yen, which is depressing…
I’m really glad I took out a loan that I can manage.

How I am thinking about the impact on household finances

I don’t think it’s time to rush and change anything yet, but there are two things I have decided to do next.

Confirm when and how the notice of interest rate revision will come from the lending bank

Calculate a simulation of what would happen if the repayment amount were to increase, just in case

The stock market is booming due to the weak yen and high semiconductor prices, but I realized once again this time that news about interest rates, which affects household finances, is happening on the same day.

This week’s policy

I will continue my regular investments as usual. However, I intend to properly face the issue of mortgage interest rates in my next article.

For those of you who have also taken out a mortgage with a variable interest rate, I would be happy if you could let me know in the comments how you are feeling right now. Please also follow and like if you’d like.

*This article is a personal reflection and record, and does not recommend the buying or selling of specific financial products or any particular financial actions. Please make decisions regarding investments and borrowing at your own risk.