3 Points to Watch Out for Now That Interest Rates Are Rising

Recently, it has been said that “Japan has returned to a world with interest rates.” The Bank of Japan is moving toward raising policy interest rates, and this is gradually beginning to affect our household finances, including mortgages, savings, and investments. The Bank of Japan raised the policy interest rate to around 1.25% in September 2026, and further rate hikes may be considered in the future depending on economic conditions.

However, many people may not know what to do when they hear that “interest rates are rising.” Therefore, in this article, we will explain in an easy-to-understand manner three points that office workers who are not familiar with finance should be particularly careful about.

1. Check your mortgage interest rate

The biggest impact is on mortgages.

People using variable-rate mortgages, in particular, need to be careful. When policy interest rates rise, it affects the lending rates of financial institutions, and there is a possibility that mortgage repayments will increase in the future.

For example, it is conceivable that the monthly repayment amount, which was around 100,000 yen until now, will gradually increase due to rising interest rates. While it will not lead to a significant increase in the burden immediately, it is dangerous to be complacent and think, “It will remain cheap in the future because it is a variable interest rate.”

The three points you want to check are as follows:

• Whether your loan is a fixed-rate or variable-rate loan

• Your current applicable interest rate

• The repayment amount if the interest rate rises by 1%

Recently, many banks also offer simulations on their websites.

Also, it is reassuring to review not only your mortgage but also your overall borrowings, such as car loans and card loans. In a rising interest rate environment, “reducing debt” becomes more important than before.

2. Do not leave your savings idle

Rising interest rates are not all bad.

In the era of ultra-low interest rates until now, you earned almost no interest even if you kept money in a regular savings account. However, due to the rate hikes, bank deposit interest rates also tend to rise. In fact, major banks have been raising their regular savings interest rates.

Therefore,

• salary transfer accounts

• regular savings

• time deposits

It is worth taking a moment to review.

For example, even when depositing the same 1 million yen, there can be a difference in the interest you receive depending on the bank.

Many company employees think, ‘It’s too much trouble, so I’ll just stick with the bank I’ve always used.’ However, in an environment where interest rates are rising, how your assets grow will change depending on your choice of bank.

However, there are points to be aware of. If you deposit your entire balance into a long-term fixed deposit during a period of rising interest rates, you will be less likely to benefit if interest rates rise further later on. The idea of diversifying the timing and duration of your deposits is also effective.

3. Investing doesn’t mean ‘you should buy anything’

The number of people who started investing because of NISA has increased. However, in a period of rising interest rates, the environment of the stock market also changes.

Generally, when interest rates rise, borrowing costs for companies increase, so the impact on business performance may be a concern. On the other hand, financial-related companies such as banks and insurance companies may benefit from rising interest rates.

The important thing is not to think simply that ‘stocks are dangerous because interest rates are rising’ or ‘you should only buy bank stocks because interest rates are rising.’

If you are building assets for the first time, it is more important to follow the basics of:

• continuing NISA installment investments

• not being swayed by short-term price fluctuations

• diversifying your investments

as mentioned above.

Watching the news can make you anxious, but for successful long-term investing, consistency is more important than market forecasting.

Summary

Here are the three things company employees should check first as interest rates rise:

1. Check your mortgage interest rate and repayment amount

2. Compare deposit interest rates and don’t leave your money idle

3. Don’t rush with investments; continue with a long-term, diversified approach

In Japan until now, ‘low interest rates were the norm.’ However, that common sense may change in the future. Even so, there is no need to panic.

What is important is not to be swayed by the news, but to understand how it will affect your household finances and to take measures one by one. Checking the terms of your mortgage contract, comparing deposit interest rates, and continuing your investment savings. Such small actions will be the first step toward successfully navigating this era of rising interest rates.