Variable interest rates rise again in October. Even if your repayment amount hasn't changed, check your 'principal and interest'

*This article is based on information as of October 5, 2026.

“It seems variable interest rates have gone up again. But my withdrawal amount this month hasn’t changed.”

Some of you may be thinking that.

With variable-rate mortgages, even if interest rates rise, your monthly repayment amount may not change immediately.

However, “repayment amount hasn’t changed” does not mean “there is no impact.”

In this article, we will organize the interest rate movements in October and the points you should check in your own repayment schedule.

October: Variable interest rates for new loans rise

In October, some major banks raised their variable interest rates for new loans.

For example, the variable interest rate for new loans published by Mizuho Bank rose from 1.025% per annum in September to 1.275% per annum as of October 1.

This is the published rate after interest rate reductions and is separate from the base rate at the counter. The actual applied interest rate varies depending on the application details and screening results. Mizuho Bank Mortgage

Also, the interest rate for new loans and the applied interest rate for those who have already borrowed do not necessarily move at the same time or by the same margin. Do not simply apply the numbers from the news to your own interest rate.

Why are variable interest rates rising?

The background to this is the Bank of Japan’s interest rate hikes to date. The changes this October reflect previous rate hikes and revisions to the short-term prime rate and other factors.

While the mechanism varies by bank, it is often reflected in the form of: Bank of Japan monetary policy -> revision of short-term prime rate, etc. -> revision of mortgage base rates and applied rates. The timing and method of determination vary by bank and product.

Furthermore, the Bank of Japan decided on an additional interest rate hike on September 18, 2026. The current policy is to keep the uncollateralized overnight call rate at around 1.25%. Bank of Japan published materials

Consider the additional rate hike in September separately from the changes this October, as material to check for future revisions. Since there is a possibility that base rates and applied rates will be revised at each bank in the future, you should check the information provided by your bank.

Mitsubishi UFJ Bank plans to revise its base rate in December

Mitsubishi UFJ Bank has announced that it will revise its base rate for variable-rate mortgages starting December 1, 2026, following the increase in the short-term prime rate announced on September 18.

However, the timing of the application of the new interest rate to those who have already borrowed depends on the type of variable interest rate contract they have. This does not mean that other banks have the same schedule. Mitsubishi UFJ Bank official announcement

Looking only at October’s mortgage interest rates is not the end of it. Make sure to check when interest rates are revised in your contract and when they will be reflected in your repayments.

Even if the repayment amount is the same, the breakdown may change

The monthly repayment amount includes the ‘principal’ to repay the borrowed money and the ‘interest’ charged on the loan.

For some variable interest rate and principal-and-interest equal repayment plans, there is a ‘5-year rule’ that keeps the repayment amount fixed for a certain period even if the interest rate changes. However, this does not mean the interest rate itself is fixed for 5 years.

If interest rates rise, the proportion of interest within the same repayment amount may increase, leaving less for the principal. This means that even if the withdrawal amount is the same, the principal may decrease more slowly.

The 5-year rule does not apply to all variable interest rate mortgage loans. Some products, such as principal-equal repayment plans, may not be eligible, so it is necessary to check with your bank, product, and repayment method. Mizuho Bank ‘How the variable interest rate system works’

The 125% rule is also not a mechanism to eliminate the burden

The ‘125% rule’ is a mechanism that limits the new repayment amount to 125% of the previous amount when revising repayments. If your contract applies this, for a monthly repayment of 100,000 yen, the cap after revision would be 125,000 yen. This is an example for explanation purposes.

However, the cap applies to the range of the repayment amount revision, not to the interest rate increase itself. It is a mechanism to suppress the increase in the monthly burden, not to eliminate the interest burden.

Depending on the repayment status, there may be cases where unpaid principal or accrued interest arises. Since the 125% rule also varies by bank, product, and repayment method, please check how it is handled in your contract.

Check this when looking at your repayment schedule

Current applicable interest rate

Check the interest rate applied to your loan. Be sure to distinguish it from the interest rates for new loans or base interest rates displayed on the bank’s website.

Next interest rate revision timing

The date for interest rate revision, the date the new interest rate is applied, and the timing for repayment amount revision are not necessarily the same. Check your contract or information from your bank.

Breakdown of principal and interest

Compare it with your previous repayment schedule and look at the amount going toward interest, the amount going toward principal, and how the balance is decreasing.

Look not only at the monthly repayment amount, but also at its contents. If you don’t know where it is listed, ask your bank, ‘Where can I check the applicable interest rate and the breakdown of principal and interest?’

If you are planning to borrow, also check the interest rate at the time of loan execution

Even if you are planning to take out a mortgage, it is important not to compare based only on the interest rates currently displayed. Variable interest rates may be revised even after you have taken out the loan.

Depending on the bank, the interest rate applied is not the one at the time of application, but the one at the time the loan is actually executed. Mizuho Bank also states that it applies the interest rate of the actual borrowing date. Mizuho Housing Loan Product Overview

For new condominiums or custom-built homes where there is a time gap between the contract and the handover, there is a possibility that the interest rate will differ between the time of pre-screening and the time of loan execution.

Check ‘which interest rate will be applied’. Furthermore, if you calculate the repayment amount in the event that the interest rate conditions change, it will be easier to plan your finances.

Summary

Even if variable interest rates rise, your monthly repayment amount may not change immediately. However, just because the repayment amount is the same does not mean there is no impact.

First, please check your applied interest rate, the next review date, and the breakdown of principal and interest.

Instead of rushing to change your loan based solely on interest rate news, look at what your current mortgage repayment details are. Do not just end it at ‘it went up or down,’ but use it as an opportunity to check.

Reference Materials

Bank of Japan: Regarding the Change in the Guideline for Money Market Operations (September 18, 2026)

Mizuho Bank: Housing Loan (as of October 1, 2026), List of Interest Rates, Mechanism of Variable Interest Rate System, Product Overview

MUFG Bank: Regarding the Review of Base Interest Rates for Variable Interest Rates

ANN/Nagoya TV: Three major banks to raise variable interest rates from October (September 30, 2026) (Supplementary confirmation of comparison with September and background of October changes)

※Interest rates and terms are subject to change. Please check the latest information from the financial institution you use for the conditions applicable to your contract.