What if the variable interest rate rises by 1 point? Repayment amounts for a 45 million yen balance and things to discuss with your family
A notice from the bank regarding a change in your mortgage interest rate.
“My monthly repayment amount hasn’t changed yet.”
Have you ever just checked that and felt like closing the envelope? You come home from work, prepare dinner, and get ready for the next day. I think there are days when you don’t have the energy to read through difficult numbers.
However, I would like you to take one more look at the “principal” and “interest” columns in that notice.
With a variable-rate mortgage, the day the interest rate changes is not necessarily the same as the day the monthly repayment amount changes. Even if the withdrawal amount remains the same, changes may be occurring underneath.
Today, using a loan with a balance of 45 million yen as an example, I will write about the burden when interest rates rise and things you should check while you still can.
■ A difference of about 20,000 yen per month if the interest rate rises by 1 point
First, let’s lay out the numbers.
Loan balance of 45 million yen, 30 years remaining, principal and interest equal repayment, no bonus repayments. This is a trial calculation for illustrative purposes, assuming each interest rate continues for the remaining period.
The monthly repayment amounts will be as follows.
・0.5% per year: approx. 134,635 yen
・1.5% per year: approx. 155,304 yen
・2.5% per year: approx. 177,804 yen
If the rate rises by 1 point from 0.5% to 1.5%, the difference is about 20,669 yen per month. That is about 248,000 yen per year. If it rises to 2.5%, the difference is about 43,169 yen per month compared to when it was 0.5%.
The “1 point” referred to here indicates a change from 0.5% to 1.5%.
This is not the current market interest rate or a future forecast. Also, it does not reflect mechanisms that defer repayment amounts for a certain period. Please note that this is not a calculation that guarantees this amount will be charged starting next month.
Even so, you can try placing the figure of about 20,000 yen per month into your current household budget.
Will it come from your monthly savings? Will you review your living expenses? Or, if you already have no leeway, will you have to dip into your savings?
Your annual family trip, your child’s lessons, or the education fund you are saving up little by little. Even if it is the same 20,000 yen, the impact on your life will differ depending on where you take it from.
■ What is happening while the “repayment amount does not change”
Variable-rate, principal and interest equal repayment mortgages have a “5-year rule” and a “125% rule” depending on the product.
The 5-year rule is a mechanism that keeps the monthly repayment amount fixed until the next repayment amount review, even if the interest rate changes. The 125% rule is a mechanism that limits the increase to 125% of the previous repayment amount if the repayment amount increases during a review.
However, this does not mean that the interest rate increase during that period is waived.
The proportion of the repayment amount going toward interest increases, and the principal decreases more slowly. If interest rates rise significantly, the monthly repayment amount may not be enough to cover the interest, potentially leading to unpaid interest.
For example, according to MUFG Bank’s explanation, both rules apply to variable interest rates and principal-and-interest equal repayment, but not to principal-equal repayment. On the other hand, PayPay Bank’s mortgage does not have either rule.
Even with the same name ‘variable interest rate,’ how the repayment amount changes depends on the contract. Do not assume that ‘our payments won’t change for 5 years either’; check your contract and the information provided by your financial institution.
Where to check: MUFG Bank ‘Interest rates for customers currently using our mortgage,’ and PayPay Bank’s explanation of the ‘5-year rule/125% rule’ (at the end of the article).
■ Three things to look at when you open your repayment schedule
Even if there are many numbers lined up, you don’t need to understand everything from the start. First, try checking these three things.
1. Current interest rate, balance, and remaining term
These are the figures applied to your current contract, not the interest rate that was in the advertisement when you purchased. If the balance and remaining term are different, the burden caused by an interest rate hike will also change.
2. How much of the repayment amount is principal and how much is interest
If you still have your previous repayment schedule, try placing them side by side. Even if the withdrawal amount is the same, the amount going toward the principal may have decreased. This is a change that is difficult to notice just by looking at your bankbook.
3. When the interest rate and repayment amount will change next
Check the interest rate review date and the month when the changed repayment amount will be applied. If you don’t know, try asking your financial institution, ‘When and under what conditions will my next repayment amount change?’
Once you have these three things, it becomes easier to turn vague anxiety into concrete preparation.
■ To avoid turning household budget discussions into a time for blaming someone
When it comes to talking about the house, you might feel like saying, ‘If only we had bought a cheaper house back then.’
However, when you bought it, there must have been a life you wanted to lead in that house. Ease of commuting, children’s schools, rooms to spend time with family. I don’t think you need to deny everything, including the reasons you chose it.
If you are going to discuss it, first try putting the future numbers on the table, such as ‘If it increases by 20,000 yen per month, where should we take it from?’
Write down your housing expenses, including management fees, repair reserve funds, property taxes, and insurance, as well as your living expenses. It is easier to compare if you divide annual expenses by month.
After that, try subtracting the amount of savings you want to keep. Will you be able to manage if your bonus doesn’t come as planned, or if you take childcare leave or work shorter hours? Try simulating it one more step according to your family’s plans.
Instead of just talking about “what to sacrifice,” write down the lifestyle you want to maintain as well. I think that makes it easier for the two of you to look at the same household budget.
■ Before rushing into refinancing or early repayment
When you feel anxious, it is natural to feel rushed to take some kind of action.
However, if you reduce your cash on hand too much through early repayment, it becomes difficult to handle illnesses or sudden expenses. Refinancing costs money, and changing to a fixed interest rate also requires checking the conditions at that time.
Please consider your options only after laying out the living funds you want to keep and the total repayment amount, including various fees.
If repayment seems like it might become difficult, it is also important to consult with your financial institution before falling behind on payments. If you are considering selling, do not judge based solely on the appraisal value; confirm the loan payoff amount, selling costs, and the money needed for your next home. An appraisal value is not a guarantee of the final sale price.
■ Tonight, it is enough to confirm just one thing
It is difficult to accurately predict the future of interest rates. However, you can check your current contract and the flexibility of your household budget.
Today, open your repayment schedule. Tomorrow, try showing the numbers to your family. Starting that way is perfectly fine.
I hope that the time you spend waiting for the monthly withdrawal while carrying anxiety alone will be shortened, even if just a little. Please start by reopening the envelope and looking at the principal and interest columns.
Where to check the mechanisms (Confirmed October 15, 2026)
・MUFG Bank “Interest rates for customers currently using our mortgage”
https://www.bk.mufg.jp/kariru/jutaku/kuriage/pop_furiwake.html
・PayPay Bank “Does your mortgage have a ‘5-year rule’ or ‘125% rule’?”
https://faq.paypay-bank.co.jp/faq/show/792?category_id=228&site_domain=customer
※The calculations are estimates based on the assumptions stated in the text. Differences may occur due to rounding in the contract. Please check with your financial institution regarding interest rate and repayment amount reviews, as well as the handling of unpaid interest.