[Rising Interest Rates] Mortgage payments could increase by 20,000 yen per month. All the knowledge you need for financial defense, to be checked right now

“We have a variable interest rate, but since rates have been low for so long, we’ll be fine.”

For those who think this way, there is one calculation I would like you to try.

If you have a mortgage balance of 30 million yen and a 25-year repayment period, a 1% increase in interest rates will raise your monthly payment by approximately 15,000 to 20,000 yen. That is around 200,000 yen per year. This is not a “what if” scenario; it is something that will definitely happen to households that have chosen variable interest rates once interest rates actually enter an upward trend.

Now that the long era of low interest rates is coming to an end, knowing exactly what will happen if interest rates rise in concrete numbers is a preparation as directly linked to your life as retirement funds or inheritance. In this article, I will explain the impact of rising interest rates on household finances and the concrete defensive measures you can take starting today.

## Why I wrote this article

I have written about retirement funds, inheritance, and vacant houses in the past, but one of the most common questions I receive from readers is, “What should I do if interest rates rise?”

When I worked in the financial sector, I saw many clients who had taken out loans with variable interest rates say, “I never thought interest rates would rise.” Once you get used to a long period of low interest rates, the very premise that interest rates might rise slips out of your mind. Even if you come for a consultation in a panic after interest rates have actually started to rise, the measures you can take are limited.

I felt it was necessary to convey once again the importance of “preparing on the premise that they will rise” rather than “thinking about it after they have risen,” so I wrote this article.

## Self-introduction

My name is Miyu. As with my previous articles, I will share information based on my experience in the financial field.

To be honest, because low interest rates continued for so long, there was a time when I myself felt, “Maybe interest rates won’t rise after all.” However, interest rates fluctuate depending on policy and economic conditions, and I realized through my experience in the field that basing your plans on the premise that they “won’t rise” is actually a risk in itself.

Based on that experience, this article is summarized from the perspective of “what should be done before interest rates rise,” rather than “what to do if interest rates rise.”

## Table of Contents

1. What happens to household finances when interest rates rise?
2. Concrete Example 1: A case where the repayment amount increased due to a variable rate loan, causing financial hardship
3. Concrete Example 2: A case where switching to a fixed interest rate was considered in advance, mitigating the impact
4. Mortgage defensive measures (thinking about switching to fixed rates and early repayment)
5. Defensive measures in terms of savings and asset management
6. Preparations that can be made for the entire household budget
7. Summary and the next step for those who are still anxious

## Connection to previous articles

In my article on retirement funds, I discussed how “rising prices lower the real value of pensions,” and rising interest rates are the flip side of that phenomenon. Prices and interest rates are closely related, and in a phase where interest rates rise, there are two sides: the burden of loans increases, while the interest on savings also rises. In this article, I will organize and explain both aspects.

## Recommended for people like this

– Those who have taken out a mortgage with a variable interest rate and have not yet made concrete preparations for rising interest rates
– Those who hold assets mainly in savings and do not know how to act in a phase of rising interest rates
– Those who do not feel how rising interest rates will affect their own household finances even when they hear the news that “interest rates are rising”

## People I dare not recommend this to

– Those who have already switched to a fixed interest rate and have a solid asset management policy
– Those who do not feel the need for preparation at all, based on the premise that “interest rates cannot possibly rise”

I will not force this on you. However, if even one of the points in “Recommended for people like this” applies to you, I think it is well worth reading.

## Reader feedback

“I realized the fear of variable interest rates through the numbers for the first time.”
“I didn’t realize that just keeping money in savings was actually a risk.”
“I realized that ‘now’ is the time to prepare, and I was able to act immediately.”

I felt that I wanted many people to know this before interest rates rise, so I decided to summarize it on note.

## About the bonuses

For those who purchase this article, I will include the following bonuses in addition to the main text.

– **Interest Rate Rise Simulation Table (Excel)**: Automatically calculates the increase in repayment amount when you enter your loan balance and the interest rate increase margin
– **Household Interest Rate Tolerance Checklist (PDF)**: A self-check to see how much of an interest rate increase your current household budget can withstand

## About the price

As with my previous articles, I will not raise the price. Precisely because rising interest rates are a theme that affects many households, I want to keep it at a price that can be picked up immediately when needed.

The price is, once again, the cost of two canned drinks.

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