“Should I sell before interest rates rise?” What sellers should look at is the buyer's budget
“Should I sell before interest rates rise?”
With news of interest rate hikes continuing, I think many sellers wonder about this. Especially if you’ve just been told by a real estate agent over the phone that “now is the time to sell.”
In this article, I will translate interest rate news into the language of “home prices.” By the time you finish reading, you should be able to decide whether to hurry or wait based on your own numbers and circumstances.
Chapter 1: What I say first when asked, “Should I sell before they rise?”
In September 2026, the Bank of Japan raised its policy interest rate (the base rate for interest rates in society) to 1.25%. This is the highest level in about 31 years.
Hearing “highest in 31 years,” some of you might have flipped back through your appraisal reports, wondering if your home’s value will drop immediately.
First, I will be honest with you. I cannot predict what will happen to interest rates in the future.
The phrase “now is the time to sell” is, in reverse, a prediction that “things will be worse later than they are now.” It doesn’t necessarily mean the person saying it has bad intentions. It’s just that no one can predict the future.
So, you don’t need to try to guess the future of interest rates. What you as a seller should look at is much closer at hand.
Chapter 2: Interest rates for sellers mean “how much a buyer can borrow”
What I am talking about here is not your own mortgage repayment.
Try to remember back to when you took out a loan to buy your current home. Before thinking about the price, didn’t you think about “how much can I afford to pay each month?”
I believe that many people looking to buy a home search for properties based on that “monthly affordable amount.” Therefore, when interest rates rise, the amount they can borrow with the same monthly payment shrinks. For a seller, interest rates are a matter of the buyer’s budget.
I call this perspective the three stages of budget.
1. The amount that can be borrowed shrinks 2. There is a time lag before it shrinks 3. The way it shrinks differs by price range
Chapter 3: One thing you can do today—convert your home’s price into “the buyer’s monthly payment”
Try entering your appraisal value, or the price of a similar home for sale nearby, into a bank website’s “repayment simulation.” A 35-year term with no bonus payments is sufficient.
For example, for 35 million yen, at an interest rate of 0.945%, it would be about 98,000 yen per month, and at 1.195%, it would be about 102,000 yen per month (my estimate. Principal and interest equal repayment, 35 years, no bonus payments. The interest rates are hypothetical figures for the calculation).
“From a buyer’s perspective, my home is a 100,000 yen per month property.” Just understanding this changes how you view the news.
Up to this point, we have converted your home’s price into “how much per month.” From here on, I have written about three things in order. How much the amount that can be borrowed shrinks with that repayment amount. When that happens. What you should check based on your home’s price range. I have also included the steps for doing the same calculation yourself and a space to write down the numbers.
You can read everything from here on for free. Feel free to pick and choose only the chapters that interest you.
Chapter 4: Step 1 If you are paying back 100,000 yen per month, the amount you can borrow shrinks by about 1.44 million yen at 0.25%
Let’s look at the “100,000 yen per month house” from Chapter 3 from the buyer’s perspective this time.
Keeping the same conditions of paying back 100,000 yen per month over 35 years, I increased only the interest rate by 0.25% each time (my own calculation; principal and interest equal repayment, no bonus payments).
-
Interest rate 0.945%: Borrowable amount approx. 35.75 million yen
-
Interest rate 1.195%: Borrowable amount approx. 34.31 million yen (approx. 1.44 million yen, about 4% less)
-
Interest rate 1.445%: Borrowable amount approx. 32.95 million yen (approx. 2.8 million yen less than at 0.945%)
However, this does not mean that “the price of the house will drop by 4%.”
Among buyers, there are those who put in a larger down payment, those who have support from their parents, and those who borrow based on two incomes as a dual-income couple. Even if the borrowable amount shrinks, there are people who will cover that difference from somewhere.
Therefore, even if someone says, “Interest rates have gone up, so let’s lower the price by that amount,” you don’t have to decide on the spot. First, check how much this difference is for your own home’s price range.
▶ Steps to calculate your own “borrowable amount”
1. Note down the “◯◯,000 yen per month” figure you calculated in Chapter 3
2. Open a bank’s “Borrowing Capacity Simulation” page
3. Enter that amount for monthly repayment, 35 years for the term, and no bonus payments
4. Enter the interest rate twice—once with the current figure and once with the figure increased by 0.25%—and note the difference
This difference is “Step 1” for your home. Now, when will this shrinkage take effect? Let’s look at that in the next chapter.
Chapter 5: Step 2 The June rate hike is in October, the September rate hike is around next April
It is not the case that houses suddenly become harder to sell the day after news of a rate hike. This is because there is a time lag before interest rates actually change.
Variable interest rates (rates that are reviewed at fixed intervals) do not change on the day the Bank of Japan raises rates. The timing of the review differs for each bank.
According to an article by Diamond Real Estate Institute (October 2, 2026), the June rate hike began to be reflected in variable interest rates from October. Of the 14 major banks, 4 raised their variable interest rates in October. The reflection of the September rate hike is expected to be around April 2027 (this varies by bank).
On the other hand, 10-year fixed interest rates were raised by all 13 major banks in October. This means that the budgets of those borrowing with fixed rates have already begun to shrink.
The budgets of those borrowing with variable rates will gradually shrink from here on out. I do not foresee a scenario where buyers disappear the week after the news.
So, when does the buyer’s budget become a “real number”? It is when they pass the mortgage pre-screening (a screening where the bank checks roughly how much they can lend before the contract). I have written about this in detail here → https://note.com/heroes_property/n/ne0a5f797c8a1
Even after receiving a purchase application, I continue to show the property to others until that person’s pre-approval is confirmed. This is to ensure that I do not take the seller’s home off the market before the buyer’s budget is certain.
▶ For those moving to a new home
For those selling their current home to buy the next one, interest rates affect both the selling and buying sides. Therefore, the order of decisions is important. I have my clients decide in this order: “Approval of the final loan application for the home being purchased → Moving date → Settlement date for the current home (the day the payment is received and the property is handed over).”
Once you understand the time lag, the final factor is the price range of your own home. In the next chapter, we will look at the three things to check together.
Chapter 6: Step 3 – Three things to check regarding your home’s price range
From here on, we will apply the discussion of interest rates to your home’s price range. Please have a notepad ready and try reading while writing down the figures for your home.
▶ ① Number of listings in the same price range
Kinki REINS (a system where real estate companies exchange property information) has figures for Osaka Prefecture for August. The number of newly listed pre-owned condominiums increased by 10.9% compared to the previous year. The average actual selling price (contract price) has fallen by 6.5% compared to the previous year.
One could view this as buyers becoming more cautious while the number of sellers is increasing. However, the reason is not just interest rates, and your home’s price is not determined by a one-month average. What you should look at is the same station, size, and price range as your home.
-
To-do: Search on SUUMO with the same nearest station, size, and price range, and note the number of listings
-
Field to fill in: Number of listings with the same conditions: ◯ listings (Date checked: ◯ month ◯ day)
▶ ② Monthly repayment for someone looking at that price
Even if interest rates rise by the same amount, the monthly difference becomes larger as the price increases. Here is the monthly difference when rates rise from 0.945% to 1.195% (my estimate; 35 years, no bonus payments).
-
25 million yen: Monthly increase of about 2,900 yen
-
35 million yen: Monthly increase of about 4,100 yen
-
50 million yen: Monthly increase of about 5,900 yen
Try calculating it the same way for your home’s price.
▶ ③ If already listed, the 4 stages of response
If you have already listed your property, look at the number of “inquiries, viewings, and applications” before looking at interest rates. Where it stops will tell you whether the issue is the price or how it is presented. For details, click here → https://note.com/heroes_property/n/n76c99547cc56
Despite writing all this, there is one point where the answer differs for every home. The percentage of buyers using loans and the amounts they borrow vary by price range, whether it’s a condo or a detached house, and the age of the building. Even with the same interest rate, the impact differs for each home. That is why I believe it is best to decide based on your own circumstances in the end.
Chapter 7: Summary + What to do starting today—Whether to rush or wait depends on your own circumstances, not interest rates
Finally, let’s look back at the “three stages of budget.”
-
1. Borrowable amount: For a monthly repayment of 100,000 yen, it shrinks by about 1.44 million yen at 0.25% (my estimate)
-
2. Time lag: The shrinkage happens gradually. The September rate hike will be reflected around April 2027
-
3. Price range: The more expensive the home, the larger the difference in the buyer’s monthly payment
When laid out like this, I believe there is no great need to panic based solely on interest rates. The reasons for whether to rush or not often lie in the timing of your move, your household finances, and your family’s circumstances.
▶ What you can do today
Put your home’s appraisal value or a nearby asking price into a repayment simulation to make it a “monthly X yen home.” If you also note the date you checked, you can compare it when the next interest rate news comes out.
▶ What to do within a week
-
Ask your agent, “In this price range, what do you see as the buyer’s monthly repayment?”
-
Talk to your family and ask, “Besides interest rates, are there any reasons to rush?”
▶ If you want to consult
If you still have questions like “What about in our case?” after reading, please ask via the contact window at the very end of this article. I (Kamiya) aim to reply within 2 days. I will not make sales calls.
Conclusion
Thank you for reading to the end.
I think news about interest rates will continue to come out many times. I would be happy if you could remember the “monthly X yen home” concept from this article each time. If you have the numbers, you won’t be swayed by the news.
Let me ask you one thing. On the day you saw the interest rate news, who did you talk to first? If you let me know in the comments, I will reply to you too.
What I did for a “home that didn’t move for half a year” is written here → https://note.com/heroes_property/n/nc4042718a7c8
For who I am, see my self-introduction here → https://note.com/heroes_property/n/n27ca1875ae14
The flow from listing to handover is summarized in the magazine “Textbook for Selling a Home | From Application to Handover” → https://note.com/heroes_property/m/m6ff457931974
For those who would like to consult
If you have read this far and are wondering, “What will happen to the buyer’s budget in my price range?”, please feel free to ask us via our official LINE account.
It is perfectly fine to ask even before you have decided whether or not to sell.
I specialize exclusively in real estate “sales” in Yodogawa-ku (Shin-Osaka), Osaka City.
I do not steer clients toward renting or buying, nor do I engage in “kakoi-komi” (exclusive listing practices).
I (Kamitani) will reply to each question personally, typically within two days. I will not make any sales calls.
▼ Consult via official LINE (Add friend)
* It would be helpful if you could include the property type (condominium, detached house, or land) and the location area (up to the city/ward) to make it easier for me to reply.