Mortgage interest rates have risen. How much will my monthly payment actually increase? Thinking about the Bank of Japan's rate hike from a household perspective

Let’s start with the conclusion.

This rate hike does not mean that the repayment amount for everyone with a mortgage will immediately increase all at once.

For those who have already borrowed at a fixed interest rate, the interest rate generally does not change during the fixed period of the contract.

On the other hand, for those who have borrowed at a variable interest rate, the interest burden may increase due to future interest rate reviews.

So, how much of an impact will there actually be?

This time, instead of focusing on the news that “the policy interest rate has become X%,” I will try to think about it by replacing it with the numbers for households paying off mortgages.

What happened this time?

At its Monetary Policy Meeting on September 18, 2026, the Bank of Japan decided on an additional interest rate hike, setting the policy interest rate at around 1.25%. And mortgage interest rates are actually moving as well.

In October 2026, some banks are raising variable interest rates, and movements toward raising interest rates on fixed-rate loans can also be seen at major banks.

However,

“The BOJ raised rates, so mortgage repayments will go up starting next month” is not that simple.

This is because the impact varies depending on the type of mortgage, the financial institution, and the contract details.

If the loan is 30 million yen, how much will it change with a 0.25% increase?

To make it easy to understand, let’s do a simple calculation with a

loan amount of 30 million yen, a 30-year repayment period, equal principal and interest repayment, and no bonus payments.

If the interest rate is 1.0%, the monthly repayment amount is about

96,500 yen. At 1.25%, it is about

100,000 yen. In other words, a 0.25% difference in interest rate results in a difference of about 3,500 yen

per month. At 1.5%, it is about 103,500 yen, so the difference from 1.0% becomes about 7,000 yen

per month. You might think “it’s only about 0.25%,” but because mortgage loan amounts are large and the periods are long, the impact of even small interest rate differences accumulates. *Since the methods for reviewing interest rates and repayment amounts for actual variable-rate mortgages differ depending on the financial institution and contract, these figures are simple calculations to help visualize the impact.

If it’s a variable interest rate, will the repayment amount increase immediately?

This is also important.

With a variable interest rate, even if the interest rate rises, the monthly repayment amount does not necessarily increase immediately.

For equal principal and interest repayments, some financial institutions adopt a “5-year rule” where the repayment amount does not change for 5 years, or a “125% rule” where the repayment amount after a review is kept within 125% of the previous amount.

However, repayment amount not changing does not mean there is no impact.

If interest rates rise, the proportion of interest within the repayment amount may increase, and the rate at which the principal decreases may slow down.

First, try checking whether your mortgage is “variable or fixed,” “what the current interest rate is,” and “when the interest rate and repayment amount will be reviewed.”

If interest rates rise, should I refinance?

That is where refinancing your mortgage becomes an option.

However,

finding a bank with a lower interest rate does not necessarily mean it is more profitable to refinance.

This is because refinancing involves administrative fees and registration-related costs.

What you should look at is not just the interest rate difference, but the difference between

the total amount if you continue to pay off your current mortgage as is and

the total repayment amount after refinancing + refinancing costs. Also, refinancing is not just about “looking for a cheaper variable interest rate.”

There is also the idea of refinancing from a variable interest rate to a fixed interest rate to suppress the impact if interest rates rise further in the future.

In the end, what is important is not just “which interest rate is more profitable,” but looking at

how much of an interest rate increase your household budget can withstand.

There is no need to panic and act right now

Looking at this rate hike, it does not necessarily mean you need to immediately change to a fixed interest rate or refinance.

First, check your

mortgage balance, current interest rate, remaining repayment period, and next interest rate review timing.

Then, try calculating with your own mortgage, asking

“What if the interest rate rises by another 0.25%?” “What if it rises by 0.5%?”
Rather than feeling vaguely anxious after watching the news, it is important to first replace it with your own numbers. —

If you have a mortgage, check your life insurance as well

There is another important thing related to mortgages and life insurance.

It is Group Credit Life Insurance (Danshin).

Just because you have 20 million yen left on your mortgage does not necessarily mean you need 20 million yen in death benefit coverage.

▶ Read “If you have 20 million yen left on your mortgage, do you need 20 million yen in life insurance? How families with group credit life insurance should think about it”

How much life insurance do you actually need?

We have released a “Required Coverage Diagnostic” that allows you to organize the shortfall in your death benefit coverage based on your family structure, children’s ages, income, savings, and survivor’s pension.

▶ View the “Required Coverage Diagnostic”

*This article is based on information as of October 2, 2026. Mortgage interest rates and review methods vary depending on the financial institution and contract details.

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