November 4, 2026

The Bank of Japan raises interest rates. When and by how much will the repayment amount increase for those with variable-rate mortgages?

Seeing the news that “the Bank of Japan is raising interest rates” and “variable interest rates are rising,” are you thinking something like this?

“Will my mortgage repayment amount increase starting next month?” “Should I switch to a fixed rate while I still can?”

To start with, for those who have already taken out a variable-rate loan, the repayment amount will not, in most cases, increase immediately after the news comes out. However, if you don’t know “when” and “by how much” it will increase, your anxiety will not go away.

I have been involved with mortgages for 25 years as a financial planner and as a former bank employee. In this article, I will talk about the reported content and general ways of thinking without using difficult terms. You can read it in 5 minutes.

The storm will surely pass. Let’s stay calm and look at this together.

What is happening right now?

The Bank of Japan raised its “policy interest rate” in September. The policy interest rate is the most significant interest rate that serves as the basis for bank interest rates.
At the October meeting, it was left unchanged. The next meeting is scheduled for December.
The interest rate when banks lend to companies (short-term prime rate) has also been rising since November.
Fixed interest rates continue to remain at a high level.

In other words, in the news, the view that interest rates are “on a path of gradual increase” seems to be common. However, when and how much they will rise depends on the financial institution and the product.

When will the repayment amount increase for those who have already borrowed?

This is the most important point.

It is said that variable-rate mortgages at many financial institutions generally have rules to prevent repayment amounts from increasing too suddenly (though some products may not have them).

1. 5-year rule

Even if interest rates change, the mechanism where the repayment amount remains the same for 5 years is common. It is considered that reviews are conducted every 5 years.

2. 125% rule

Even if the repayment amount increases during a review, there is often an upper limit set at 1.25 times the previous amount.

In the news, it is widely reported that the impact on the repayment amounts of those who have already borrowed is expected to be starting next year (2027). However, the timing varies depending on the financial institution and the product.

However, there is one point to be aware of.

Even if the repayment amount is capped, it is said that the portion of interest that has increased may be deferred to a later date as “unpaid interest.” In other words, even if your monthly payment does not change, there is a possibility that a balance will remain later.

It is important not to assume that “everything is fine because the repayment amount does not change.”

*For products without these rules or for principal-equal repayment plans, it is common for the repayment amount to change immediately when the interest rate changes. For details, please check your own contract terms or consult with your financial institution.

If interest rates rise, how much will the monthly payment increase?

Here is one rough estimate.

For example, if you have a 35 million yen loan over 35 years, it is estimated that for every 0.25% increase in interest rate, your monthly payment will increase by about 4,000 yen.

Some may feel that “it’s less than I thought.” However, if interest rates rise several times, those amounts will accumulate. The important thing is to think ahead about “whether your household budget can handle an extra 10,000 yen per month.” Just doing that will make you feel much more at ease.

*The amount will vary depending on the balance and the remaining term.

If you are thinking, “Should I refinance to a fixed rate?”

Refinancing is said to be one option. However, it seems there are cases where people regret it if they decide in a hurry.

People who are said to be well-suited for refinancing

Generally, it is said that the following people are more likely to benefit.

You have a large remaining loan balance (a guideline is 10 million yen or more)
There is a large difference between your current interest rate and the new interest rate (a guideline is 0.5% or more)
Your repayment still has a long way to go (a guideline is 10 years or more remaining)

These are just general guidelines. In reality, it depends on the financial institution and the conditions.

It is common for refinancing to incur “costs”

There are examples where fees and registration costs can amount to a few percent of the loan amount (nearly 1 million yen for a 30 million yen loan). It is said that even if the interest rate drops, after deducting the costs, it may not be profitable.

Changing from a variable to a fixed rate often increases monthly repayments

It is currently reported that fixed rates have higher interest rates than variable rates. Therefore, it seems that refinancing from a variable to a fixed rate often results in higher monthly repayments.

A fixed rate is considered a choice to obtain the peace of mind that repayment amounts will not change even if interest rates rise in the future. It is said that it is important to consider whether your current household budget can reasonably withstand that burden.

It is common for there to be a “screening” process for refinancing as well.

At many financial institutions, it is common for a screening to be conducted just as it is when taking out a new loan when refinancing. The following are examples of things that are often checked.

Health condition(because you have to re-enroll in group credit life insurance)
Years of continuous employment
Other borrowings(car loans, credit card installment payments, etc.)

There also seem to be cases where people think, “I’ll refinance,” but then get stopped by the screening.

Four things you can do starting today

This is merely an example of a general way of thinking. It is not advice for individual situations; please check your contract details and consult with a financial institution or professional before making actual decisions.

1. Check your “interest rate type” and “review period” in your contract

Is it variable or fixed? Are there a 5-year rule or a 125% rule? When is the next review? Start by knowing these things.

2. Check “how much is left now” and “how many years are remaining”

This is the starting point for both considering refinancing and making future projections.

3. Check with your household budget if “it would be okay if the monthly payment increased by another 10,000 yen”

By thinking about it in advance, you can avoid panicking.

4. If you are considering refinancing, have multiple financial institutions provide estimates

Don’t decide based on just one company; compare them, including costs.

Finally

When you feel anxious about money, the thing you can rely on most is “your own core”.

Why did you buy the house? What kind of life do you want to continue living from here on? If you have that core, you will be less likely to be swayed by interest rate news.

Feeling anxious is proof that you are facing the situation properly. I would be happy if this article helps you organize your thoughts even a little. Thank you for reading until the end.

Caution

This article is intended to provide general information based on reports as of November 5, 2026. It does not recommend specific financial products or institutions. The timing for reviews of interest rates, systems, and repayment amounts varies depending on the financial institution and product. The figures in this article are estimates including calculations and do not guarantee future interest rates or repayment amounts. Please check your own contract details with your financial institution. Please make final decisions at your own responsibility.

For those who want to know more about mortgage “screening”🍃

Whether you are refinancing or taking out a new loan, knowing what is “being looked at” during the screening process will help you prepare without panic.

▶ You lose if you don’t know. 7 things “being looked at” in mortgage screening (Paid content: 780 yen)

▶ “I wish I had known sooner…” 5 things people often regret regarding mortgages (Paid content: 780 yen)

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