Variable Mortgage Rates: Interest Rate Hikes Lead to a 10.66 Million Yen Difference in Total Repayment

How much will the total repayment for a variable rate mortgage increase due to interest rate hikes? In the case of borrowing 40 million yen over 35 years, depending on how interest rates rise, there is a difference of approximately 10.66 million yen in the total amount. Even so, there are cases where it is cheaper than a fixed rate.

Every time I look at house prices, I freeze.

I have some money to buy.
But, it’s just too expensive…
The apartment in my neighborhood is starting at 100 million yen for a 3LDK…

Then, the news of interest rate hikes.
Honestly, I’m anxious if interest rate hikes continue at this pace, and I feel rushed about whether I should buy a house sooner. This is my true feeling.
I was told it was inflation, but I missed the boat on buying. I don’t think I’m the only one.

The only time I’ve borrowed money was for an apartment business loan. It was variable, for 20 years.
I don’t remember interest rates rising for over 10 years.
I never felt anxious either.

The feeling from those days just doesn’t apply anymore…

For those currently repaying, even though the numbers on the schedule are the same, they feel uneasy every time there is news. For those looking to borrow, both variable and fixed rates are scary.

So, how much will we end up paying in total over 35 years?
“Yes, that’s what I wanted to know.” To ensure people can say that, I calculated it separately for those currently repaying and those looking to borrow. First, I will show you two sheets with the answers (calculation results). I will explain them thoroughly later.

📸 The first sheet shows the “past and present” of the initial monthly payment.
What I want you to look at is the “price of peace of mind” (the difference between fixed and variable) at the bottom. In 2021, it was 16,550 yen per month; now it is 50,090 yen per month. The peace of mind of a fixed rate has become quite expensive in five years.
The fixed interest rate is too high!!!! 3.8!? Will it go up even more??
And the difference for fixed is 50,000 yen more per month!!!
Are you saying I shouldn’t borrow at a fixed rate??
Are you telling me to die??

📸 The second sheet shows how the monthly payment changes after borrowing.
The focus is on the “35-year total repayment” at the bottom of each row. Depending on whether interest rates stop or rise every six months, the difference is about 7.25 million yen for someone from 2021, and about 10.66 million yen for someone borrowing now.

So, looking at this difference, should I “just go with a fixed rate”? It wasn’t that simple.

Chapter 1 🎯 Conclusion: The total repayment for a variable rate mortgage changes by 7 to 10 million yen depending on how interest rate hikes continue

Roughly speaking, it’s like this.

1. 🏠 People who borrowed at a variable rate of 0.475% in 2021: If interest rate hikes stop, the total repayment is about 50.18 million yen; if it rises by 0.25% every six months, it is about 57.43 million yen. The difference is about 7.25 million yen. The monthly payment is about 103,000 yen → now 110,000 yen → about 124,000 to 137,000 yen in 2031 (Chapter 4).

2. 🔑 People borrowing now at a variable rate of 1.525%: About 53.76 to 64.42 million yen. The difference is about 10.66 million yen (Chapter 5).

3. 🧱 People borrowing now at a fixed rate (Flat 35) of 3.83%: About 72.68 million yen. Even if interest rate hikes continue every six months, the variable rate is calculated to be about 8.26 million yen less. However, if the variable rate rises to around 4.25% and does not fall, the total amounts will be equal (Chapter 5).

👉 Japan Housing Finance Agency “Flat 35 Interest Rates”

Personally, I grasp the monthly amount as “roughly” and look at the range of total repayment first.

The difference in monthly payments is about several thousand to 30,000 yen. But in terms of the total amount, it’s a range of several million to 10 million yen. This is what determines the future of household finances. Details are in Chapter 4 and Chapter 5.

Even when it comes to investments, I prefer to line up and compare interest rates, terms, and costs before looking at expectations. Since a mortgage lasts for 35 years, I find myself wanting to see ‘how much it will cost in the end’ even more.

💡 If you can translate the news that ‘rates went up by 0.25%’ into ‘how much will our total amount change?’, conversations between couples become much more concrete.

However, your repayments do not increase the month after the Bank of Japan raises rates. That time lag is surprisingly important.

Chapter 2 🏦 Until the Bank of Japan’s interest rate hike reaches your mortgage repayment: The 5 stages of floating rates

There are 5 steps before it reaches you.

1️⃣ The Bank of Japan’s policy interest rate rises
2️⃣ The bank’s short-term prime rate rises
3️⃣ The floating base rate rises (for megabanks, it is the short-term prime rate + 1%)
4️⃣ Your applicable interest rate rises (reviewed twice a year. Based on April 1st and October 1st, effective from the July and January repayments)
5️⃣ Your repayment amount changes (once every 5 years. Even if it rises, it is capped at 125% of the previous amount)

The final stage, the 5-year rule and the 125% rule, is the key. The details vary by bank and contract, and some products do not have them.

I am not a morning person and I am the type whose brain doesn’t process numbers until I’ve had coffee. Even with a brain like that, I can follow these 5 steps.

I have a personality where I can only feel calm once I understand the reasons. I believe that if you understand the mechanism, you won’t have to be swayed every time there is news.

💡 There is a time lag of several months to several years from an interest rate hike to the actual repayment. There is no need to panic. …However, the amount that has been decided is already set.

How does everyone feel about that ‘time lag’? There is a survey that came out in October.

Chapter 3 📊 Reading the ‘80% of repaying households are at their limit with 10,000 yen per month’ survey as the numbers state

The headline is strong. But when you read the content, you can clearly see where the anxiety is directed.

This is a survey conducted online by Chuo Property Co., Ltd. in October 2026, asking 240 people in their 20s to 40s who are currently repaying mortgages.

😟 Anxiety about rising interest rates: 87.1%

The content of the anxiety is ‘monthly repayment amount increasing’ at 65.5% and ‘total repayment amount increasing significantly’ at 27.3%.
The household budget for next month is scarier than the total amount 35 years from now.

💴 What is an increase you can handle without difficulty?

If you add up ‘even 1 yen is tough’, ‘less than 5,000 yen’, and ‘less than 10,000 yen’, it comes to 80.0%. This is the reality of the ‘80% are at their limit’ figure, and it is not the percentage of people who will be unable to make repayments.

🛠️ Measures being considered

Saving money 40.8%, early repayment 38.3%, refinancing to a fixed rate 36.7%, selling/moving 9.2%. I will use this in Chapter 7.

👉 PR TIMES Chuo Property: “[2026 Survey] 80% of mortgage-repaying households reach their limit with a ‘10,000 yen monthly increase’.”

I completely understand the fear of monthly payments. However, the bigger difference lies in the total amount.

For new NISA investments, I try to look at ‘how much it will be in the end’ rather than daily price fluctuations. The same goes for loans; I want to know the 35-year total before I worry about a few thousand yen per month.

💬 If you were startled by the ‘Is 80% already at their limit?’ part, you should feel a bit more at ease if you go back to the survey questions.

So, where does the total amount increase for those who have already borrowed?

Chapter 4 🏠 If you borrowed at a variable rate of 0.475% in 2021: With the 5-year/125% rule, total repayment is approximately 50.18 to 57.43 million yen.

Even if the repayment amount hasn’t changed yet, the underlying figures are already moving.

📋 Example conditions

In April 2021, 40 million yen, 35 years, 0.475% variable rate, principal and interest equal repayment, no bonus payments. I chose 40 million yen because the average home price in the Flat 35 user survey was about 42 million yen.

‘Isn’t 0.4% too low?’ you might think. But at the time, new variable rates at megabanks were around 0.375% to 0.725%. It was actually quite normal.

🔒 Up to this point, it’s already decided

The applicable interest rate will go from 0.475% to 1.625% by July 2027 (based on the November short-term prime rate revision; the retail rate revision is an estimate).
The repayment amount has already been revised from 103,393 yen to 109,954 yen in January 2026. The next review is in January 2031.

📈 Monthly payments from January 2031 and the 35-year total repayment

• 🟢 If interest rate hikes stop here: 124,333 yen / Total repayment approx. 50.18 million yen

• 🟡 If it rises by 0.25% every year: 137,260 yen / approx. 56.51 million yen

• 🔴 If it rises by 0.25% every six months: 137,442 yen (stops at the 125% cap) / approx. 57.43 million yen

Even if it stops, it will increase by about 14,000 yen per month in 2031. This is easy to overlook.

⚖️ What about those who borrowed at a fixed rate in the same year, 2021?

At Flat 35’s 1.37%, it remains 119,943 yen per month, with a total of about 50.38 million yen.
Even if it stops, the variable rate is only about 200,000 yen cheaper. If interest rate hikes continue, the variable rate will end up being about 6 to 7 million yen more expensive.

So, is the variable rate a failure? I don’t think you can say that. It is a fact that until 2025, they were paying about 17,000 yen less per month, and even now, they are paying about 10,000 yen less per month than those on fixed rates.

🕳️ Even if the repayment amount is the same, the content changes

While the repayment amount remains constant, the portion of the increased interest rate is applied to interest. The proportion of interest in the repayment amount was approximately 15% in May 2021 and approximately 36% in January 2027. If semi-annual interest rate hikes continue, it will be about 70% in 2030.

The reduction of the principal slows down. The portion capped at 125% is also carried over to later.
The fact that the repayment amount has not changed is not a source of relief, but a postponement of the problem. That is what I think.

During the Lehman Shock, I lost money on margin trading stocks. Borrowed money has a delayed effect when interest rates or market prices move. Having learned that through experience, I think the most frightening thing is to remain in the mindset that ‘it is normal for rates not to rise’.

🔍 Where to look on the repayment schedule

In an April 2021 survey by the Japan Housing Finance Agency, 65.0% of borrowers expected that ‘interest rates will hardly change over the next year.’ In January 2026, 73.7% said they would ‘rise’ (the respondents were different). It feels like the atmosphere has completely changed in five years.
👉 Japan Housing Finance Agency ‘Survey on Housing Loan Users’

💬 If you have a family member who says, ‘The repayment amount hasn’t changed, so it doesn’t affect us, right?’, please show them this chapter as it is.

On the other hand, for those who are going to borrow from now on, the starting interest rate is already different.

Chapter 5 🔑 When borrowing 40 million yen in 2026: Variable is about 53.76 to 64.42 million yen, fixed is about 72.68 million yen

The current variable rate is higher monthly than the 2021 fixed rate. …Aren’t you surprised?

📋 Example conditions

In November 2026, 40 million yen, 35 years, variable 1.525% (Sumitomo Mitsui Banking Corporation example in October). The start is 122,964 yen per month, and it is expected to be 1.775% in July 2027. The first review is in January 2032.

📈 Monthly amount from January 2032 and 35-year total repayment

• 🟢 If the interest rate hike stops here: 128,845 yen / approx. 53.76 million yen

• 🟡 If it rises by 0.25% every year: 150,300 yen / approx. 63.30 million yen

• 🔴 If it rises by 0.25% every six months: 153,705 yen (125% cap) / approx. 64.42 million yen

The monthly amount goes from about 123,000 yen to about 129,000 to 154,000 yen. But the difference in the total amount is about 10.66 million yen.

🧱 Comparing with fixed rates

At 3.83% for Flat 35, it’s 173,054 yen per month, totaling about 72.68 million yen. That’s about 50,000 yen more per month from the start compared to a variable rate.
The “price of peace of mind” for a fixed rate has gone from about 17,000 yen per month in 2021 to about 50,000 yen per month now. It has roughly tripled in five years.

Even if it rises every six months to the 3% range, the total amount for a variable rate is still about 8.26 million yen less. The rates equalize if the variable rate rises to around 4.25% and stays there; if it goes beyond that, the fixed rate becomes cheaper. Conversely, if interest rate hikes stop, the variable rate will be about 19 million yen less.

Even for someone with a gambler’s temperament like me, when it comes to a 35-year commitment, I naturally want to look at the “total amount in the worst-case scenario.” Precisely because I am an optimist, I keep the pessimistic figures in mind first. That is what I would do.

From my perspective as someone hesitating because it’s “too expensive,” a 50,000 yen monthly difference is quite significant. Feeling that it’s expensive isn’t because I’m stingy, but because the numbers say so. That’s why I don’t rush to buy. However, I also believe that waiting has its own costs.

💡 If you are talking about this as a couple, it is easier to reach an answer by asking “How much are we willing to pay per month for peace of mind?” rather than “Which one is the correct choice?”

How to decide the loan amount and whether to choose variable or fixed are covered in Chapters 7 and 8 of the main article, which is the next piece.
👉 [Complete Preservation Edition] What is the method to avoid mortgage regrets?

So, what if the loan amount is 30 million or 50 million yen?

Chapter 6 🧮 Quick reference table by loan amount: 30 million, 40 million, 50 million yen—how much does the monthly payment increase when interest rates rise?

Even with the same interest rate, the way the payment increases changes depending on the amount borrowed.

The starting point is the current variable rate of 1.525% (35 years, equal principal and interest). This is a guideline for when repayment amounts are revised immediately.

📊 Monthly increase from 1.525%

• 30 million yen: +7,156 yen at 2.0% / +23,232 yen at 3.0% / +37,568 yen at 3.83% fixed

• 40 million yen: +9,541 yen at 2.0% / +30,976 yen at 3.0% / +50,090 yen at 3.83% fixed

• 50 million yen: +11,926 yen at 2.0% / +38,720 yen at 3.0% / +62,613 yen at 3.83% fixed

Amounts in between can be roughly calculated proportionally. For example, for 35 million yen, it’s about 8,800 yen more per month at +0.5%.

This simplicity of proportionality is something I, with a science background, appreciate. With just a calculator, I can create my own row.

As someone who was obsessed with “Dragon Quest III” as a child, seeing “how many more times until the next level” makes me feel a bit calmer. Interest rates aren’t scary if you look at them one step at a time.

💡 You don’t need to memorize everything. Just look at the row for your amount whenever there is news. That is why it is worth saving.

The numbers are all out. Finally, turn this into a conversation between the two of you.

Chapter 7 👫 Checking “Our Total Repayment” to Decide as a Couple

It is much less likely to lead to an argument if you decide before the rates go up, rather than talking about it after they have.

✅ Our Total Repayment Checklist

• ☐ What is our current applicable interest rate?

• ☐ When is the next review of our repayment amount? (Are there 5-year/125% rules in place?)

• ☐ What is the total repayment if interest rates stop rising versus if they continue to rise? (Use the range from Chapters 4 and 5 as a guide)

• ☐ How much per month can our household budget absorb? (Agree on one number as a couple)

• ☐ If that amount is exceeded, what will we do first?

• ☐ When will we talk about this next? (When the review notice arrives, or when we get our bonuses)

🛠️ Four measures for when payments increase (in the order of investigation from Chapter 3)

• 🧾 Savings: Start with fixed costs

• 💰 Prepayment: You can reduce interest. However, do not reduce your cash on hand too much

• 🔁 Refinancing to fixed: It incurs costs, and current fixed rates are on the higher side (Chapter 5)

• 🏠 Selling/Moving: Keep this in the back of your mind as a final option

I am someone who thinks Uniqlo is enough for clothes, but I feel that saving money is easier to sustain if you decide “where to cut” first rather than relying on willpower.

Talk it over thoroughly with your partner and lay out the concrete numbers.
It is easier to talk about difficult topics when you discuss numbers rather than talking about whether you are scared or not.

💡 Even difficult conversations like “Was it a mistake to choose a variable rate?” can be kept from turning into mutual blame if you translate them into numbers.

Finally, just one thing to do today.

Chapter 8 📝 Summary: Focus on your “total repayment range” rather than interest rate hike news

A three-line recap.

• 🏠 People who took out a variable rate loan in 2021: About 50.18 million yen if rates stop, about 57.43 million yen if they keep rising

• 🔑 People borrowing now: Variable rate is about 53.76 to 64.42 million yen, fixed rate at 3.83% is about 72.68 million yen

• 📅 Repayment amounts jump not on the day of the rate hike, but on the “review date” (5-year/125% rule)

I am still in the middle of thinking about what to do regarding a house.
I have some money to buy one. But it is too expensive.
And it seems everyone else is feeling anxious too. I wasn’t the only one feeling that way.

Even as an optimist, I want to know the 35-year total in advance.
That is why, rather than financial gain or loss, I want to borrow an amount that allows me to face tomorrow with peace of mind.

📌 Here is the one step you can take starting today.
Take out your repayment schedule (loan notice) and circle your applicable interest rate and the date of your next review.
If you are planning to borrow, try comparing the total amounts for “if rates stop” and “if they keep rising” together as a couple.

If you read something next, make it the main article on mortgages. “The amount you can borrow vs. the amount you can repay” (Chapter 7) and “Variable or Fixed?” (Chapter 8) will clarify how to use today’s numbers.
👉 [Complete Guide] What is a method for a mortgage you won’t regret?

You don’t need to follow every piece of news about rate hikes.
Start by checking your own “review date” and “range of total repayment” one by one.
I would be happy if “Yes, that’s what I wanted to know” leads to today’s “Let’s do this.”

📚 Related Articles

👉 [Complete Guide] What is a method for a mortgage you won’t regret?

👉 [The 1.25% Interest Rate Era] Who benefits from the Bank of Japan’s rate hike? A complete breakdown of the impact on deposits, mortgages, stocks, and government bonds

This article is for informational purposes only and is not a solicitation or advice for investment or borrowing. The calculations are based on specific conditions, and actual interest rates and repayment amounts will vary depending on the financial institution and contract, so please make decisions at your own responsibility.

About the author of this article
Minato | An ordinary salaryman. I have over 20 years of stock investment experience and have lived through the Livedoor, Lehman, and COVID shocks.
I research investments, AI, and life/money topics using the latest AI, verify them myself, and summarize them into numbers. I have never taken out a mortgage; the only loan I have taken out is an apartment business loan. That is precisely why I write by checking primary sources from public institutions and banks.
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Last updated: October 30, 2026