The Option of 'FP Consultation' for Those Worried About Repayments Due to Rising Mortgage Interest Rates

“The interest rate has doubled since I borrowed.”
“I didn’t think it would rise at this pace.”
“I’m worried if I can keep making these payments…”

Even if you anticipated interest rate hikes when you took out your mortgage, it’s a different story when it actually starts affecting your repayments.

I personally thought I had taken out a mortgage that I could comfortably repay even if rates rose by 3%, but now that they have risen by 0.9%, I feel really uneasy.

If interest rates continue to rise like this,

• What should I do if they go up even more in the future?

• Should I make early repayments?

• Should I switch to a fixed interest rate?

Don’t these kinds of anxieties arise?

However, you don’t need to get caught up in just dealing with your mortgage.

The first thing I want you to check is whether your entire household budget, including the mortgage, will continue to run smoothly in the future.

If you dig deep into your mortgage anxiety, isn’t it ultimately “anxiety about your future life”?

• Children’s education expenses

• Money for travel, hobbies, etc.

• How the couple works

• Provisions for old age

If you list out the money needed for your future life and try to predict the movement of your finances, the true nature of that “vague anxiety” will gradually become clear.

For those who find it difficult to organize this on their own, utilizing a free FP consultation is one option.

In this article, I will introduce a way of thinking to help you switch from “vague anxiety” to “understanding and preparing,” so you can manage your mortgage well.

*I do not plan to have any paid articles on my note.
You can read everything for free until the end, but some advertisements may be displayed.

Even if mortgage interest rates rise, there is no need to immediately refinance or make early repayments.

Looking at social media lately,

I’ve started seeing posts like,
“I made an early repayment because interest rates went up,”
“I refinanced to a bank with lower interest rates,” “I requested a switch to a fixed interest rate.”

I have started seeing posts like these.

Of course, there are cases where refinancing or early repayment is effective, but rising interest rates do not necessarily mean you must immediately review your mortgage.

Before acting in a panic, the first step is to confirm whether your household finances truly require countermeasures.

Even if you anticipated rising interest rates, it is natural to feel anxious when repayment amounts actually increase.

Many people likely understood that “interest rates might rise in the future” when choosing a variable rate.

Even so, what you imagined in your head is different from when interest rates actually rise and affect your repayments.

Even if you can afford the mortgage alone, if your child’s tuition fees increase at the same time or unexpected expenses pile up, your household’s financial flexibility will shrink.

Furthermore, it is understandable to feel anxious in a situation where the possibility of future interest rate hikes is on everyone’s mind.

It is precisely because of this situation that it is important to accept the fact that interest rates have risen and think about the future.

The first thing you want to check is “Can I continue to pay this off without difficulty in the future?”

What is important with a mortgage is not just whether you can make this month’s payment.
It is whether you can continue to make repayments over 20 or 30 years while living your ideal life.

When mortgage interest rates rise, the first thing you want to check is,

“Is my household budget really okay if I continue with these repayments?”

That is the question.

If there are no problems when looking into the future, there is no need to panic and take measures just because interest rates have risen.

Conversely, if you find out that your household finances will become tight in a few years, you can start preparing now.

Instead of thinking “I have to do something,” confirm “Is it okay to stay as I am?”

Let’s start from here.

Anxiety about a mortgage is often not just a problem with the mortgage itself

When mortgage interest rates rise, it is natural to focus solely on the mortgage, but the cause of your anxiety may not be limited to the mortgage alone.

It is necessary to consider everything, including education expenses and retirement funds

If you dig deep into your anxiety about your mortgage, doesn’t it ultimately boil down to ‘anxiety about your future life’?

As you can see, there are other expenses that will be necessary in the future besides the mortgage.

When mortgage interest rates rise and repayments increase, it affects the entire household budget, including money available for education, savings, and hobbies.

That is why those who are worried about their mortgage should not think about it in isolation, but also consider the money that will be needed in the future.

Being able to pay now and being able to pay comfortably in the future are two different things

Even those who are currently making repayments without any issues and think ‘I guess it’s fine for now’ should check their situation at least once.

This is because having a surplus in your current household budget is different from having the same surplus in the future.

• The period when education expenses are highest

• Major home repairs

• Timing for reviewing repayment amounts

• Periods when income changes

Since a mortgage lasts for a long time, your household financial situation will change during that period.

When you start to feel the impact of interest rates, I believe it is the perfect time to look not just at your current household budget, but also at your future finances.

Visualizing your future finances can change ‘vague anxiety’ into something concrete.

‘Will I be okay in the future…?’

Perhaps you feel anxious because you don’t know the answer.

• In how many years will things become difficult?

• How much should I be saving?

• Will my household budget really go into the red?

If you keep worrying without knowing these answers, your anxiety will only grow.

Therefore, let’s take a moment to turn your future finances into numbers and check ‘how your money will move going forward’.

Seeing when and how much money you will need

The shortcut to checking how your future money will move is to create a life plan or cash flow table.

Simply put, it is the image of lining up your future income, expenses, and changes in savings balances over time.

‘My household budget will go into the red when my child enters higher education.’

‘At this rate, I might be a little short on retirement funds.’

‘It looks like the household budget will be a bit tight only during this period.’

When these things become visible in numbers, your vague worry of ‘being anxious about my mortgage’ becomes concrete, like ‘I’m worried about the time my eldest son enters university in eight years.’

Once you understand this, you can prepare money systematically for that time.

Also, another major benefit of visualization is that it helps prevent you from resorting to excessive saving out of fear of the unknown, creating room to enjoy the present.

Try checking it while also including the scenario where interest rates rise further.

If you are worried about mortgage interest rates, try checking what would happen if rates rise even further.

• If current interest rates continue

• If interest rates rise a little more

• If they rise significantly more than expected

By looking at the impact on your household finances across multiple scenarios like these,

you will be able to see at what point rising interest rates might start to strain your household budget.

There is also value in knowing that ‘everything is fine as it is’

Just because you create a life plan table does not mean you will necessarily find problems.

You might find that ‘it seems okay even if interest rates rise a little more,’

or ‘it seems fine at the current savings pace even if education expenses increase.’

It is possible to confirm things like this.

Once you know that, there is no need to be more afraid of rising mortgage interest rates than necessary.

A mortgage is a long-term commitment.

Rather than worrying for years about whether things are okay, I believe there is value in checking the numbers once and confirming that ‘everything is fine for now.’

There is also the option of ‘FP Consultation’ for creating a life plan table

You can simulate your future finances on your own.

By using tools like the Financial Services Agency’s Life Plan Simulator or the Japan Association for Financial Planners’ Life Plan Diagnosis, you can get a rough idea of your future household finances just by entering simple information.

However, there are not many items you can enter, and there are limits to reflecting the specific, detailed conditions unique to your household.

Also, while AI can organize numbers and run simulations, I feel that consulting a person is valuable for drawing out hopes and anxieties that you may not have even been able to put into words yet.

You might think, ‘Isn’t that just because you’re an FP yourself?’, but if you are going to create a solid life plan table, I believe that enlisting the help of an FP is still a very effective option when considering both accuracy and time performance.

Creating a life plan table is an area of expertise for financial planners.

Life planning is one of the representative themes that financial planners receive consultations on.

Not only income and monthly living expenses, but also

• mortgages

• education expenses

• car purchases

• home repairs

• travel and hobbies

• work styles

• retirement funds

and other factors are checked to organize the future flow of money tailored to each household.

While the tools and consultation methods used by financial planners vary, using specialized life planning software allows for setting quite detailed conditions.

If you try to create one by yourself,

‘How much should I set for education expenses?’

‘What is the inflation rate?’

‘What interest rate should I use to calculate the mortgage?’

It takes a lot of time to research all these things while building it.

In that respect, if you proceed while talking with a financial planner, they can help you organize the necessary items as you answer their questions.

Some financial planners may take about three 2-hour sessions to create it thoroughly, but with a service called Money Coach, you can complete a life plan table in one 1-hour session, and even with your webcam turned off.

For those who think, ‘Creating a life plan table on my own seems a bit difficult…’, utilizing a free financial planner consultation is one option.

You may discover household budget issues you hadn’t noticed yourself.

The benefit of having an FP create a life plan table is that they can look at your entire household budget, not just your mortgage.

When you look at your household budget on your own, you inevitably focus only on what concerns you.

In this case, that would be ‘mortgage interest rates’.

However, when you organize it with a third party,

‘Actually, this fixed cost has a bigger impact on the household budget than the mortgage’

‘At the current savings pace, there’s no need to be that afraid of interest rate hikes’

‘It seems better to increase the estimate for education expenses a bit more’

You may find that other issues come to light, such as these.

By organizing things with an FP, it becomes much clearer what you need to think about.

If you know when times will get tough in the future, you can identify the causes and prepare for them.

What is important in a life plan is not just looking at whether you will be in the red or not.

If you find a time in the future when your household budget will be tight, you can even check why it will be tight at that time.

• Are education expenses the problem?

• Is the mortgage a burden?

• Is there a change in income?

If the cause is different, the countermeasures will also change.

If it is a problem for 5 or 10 years from now, you can prepare for it little by little starting now.

Being able to use time to your advantage is a major benefit compared to panicking at the last minute.

And you can also adjust your life plan table while thinking about ‘how to prepare’ together with an FP.

Points to keep in mind when using free FP consultation services

I have introduced the benefits of FP consultations so far, but that does not mean that just any free service will do.

When using a free FP consultation service, you should at least be aware of the following three points.

• Choose the service you apply to carefully

• Clarify the purpose of your consultation

• Do not sign a contract on the spot even if a product is proposed

Understand the mechanism of free consultations and choose the service you apply to

The first thing you should know is

“Why can I consult with an FP for free?” that is.

Many free FP consultation services use the commissions they receive from financial institutions and others when financial products such as insurance are proposed and a contract is signed as one of their revenue sources.

Therefore, the system is set up so that the person seeking advice can consult with an FP for free.

This mechanism itself is not bad.

Consultants can discuss their household finances and life plans for free, and there are benefits if they find a product they truly need.

However, what I want to be careful about is “what kind of FP will I be consulting with?”

Some free FP consultation services introduce representatives from affiliated external FPs, while others only introduce FPs who belong to the operating company.

Even though they are all called FPs, the flow of the consultation will differ between an FP who belongs to an insurance company and whose goal is to sell insurance, and an FP who specializes in real estate (mortgages) and life planning.

What you want to consult about this time is, “I want to confirm if my future household finances will be okay, including the rise in mortgage interest rates.” that is.

That is precisely why I want you to choose a service after confirming “what kind of FP you can consult with.”

For example, Money Career, which is often seen on social media, is a service that partners with over 147 financial consulting firms and has 3,000 external FPs, introducing representatives according to the content of the consultation.

On the other hand, the aforementioned Money Coach is a rare service operated by a company that was originally strong in real estate, and the FPs introduced are only those who belong to the company itself.

It is not a matter of which is good or bad, but rather it is important to choose by being aware of whether ‘what you want to consult about’ matches the ‘specialized field of the FP in charge’.

The important thing is to clarify the purpose of the consultation

When using an FP consultation, what I think is particularly important is to decide ‘what you are consulting for’.

‘I am vaguely worried about money’

It is fine to consult in that state.

However, if you leave everything to the FP as it is, there is a possibility that the conversation will drift away from what you really wanted to know.

In this case,

‘Mortgage interest rates have risen, and I am worried about whether I can continue to repay without difficulty in the future. I want to create a life plan table including education expenses and retirement to check my future finances.’

is enough to convey.

Even just this makes the purpose of the consultation quite clear and makes it less likely for the conversation to go off track.

There is no need to sign a contract for proposed products on the spot

Due to the structure of free consultations, you may be proposed financial products such as insurance.

However, there is no need to feel that ‘they have consulted with me this much, so it would be rude to refuse…’.

Whether the proposed product is truly necessary is a separate matter from the life plan consultation. Even if it looks good, there is no need to sign a contract immediately on the spot.

You can take it home once,

‘Is it really necessary for me?’

‘Are there any other options?’

‘Is it necessary to decide now?’

and think about it before making a judgment, and that will be fine.

Free FP consultation is something to use first to organize your household finances.
A stance of using it with that level of detachment is sufficient.

Review your household finances and consider mortgage countermeasures if necessary

Once you have checked this far and realized that “the future burden might be a bit too high if things continue as they are,” only then should you consider specific countermeasures.

Consider refinancing, early repayment, switching to a fixed interest rate, etc.

As for countermeasures on the mortgage side, there are options such as:

• refinancing with another bank

• early repayment

• switching to a fixed interest rate

• negotiating for a lower interest rate

.

However, the correct choice depends on the individual.

Refinancing involves various fees, and making early repayments will reduce your cash on hand.

That is why it is important to decide “what to do and why” after looking at your household finances as a whole.

For more information on mortgage refinancing and interest rate reduction negotiations, please also refer to the following articles.

There is also the option of reviewing expenses other than your mortgage

As a result of checking your life plan table, there is also the option of not changing the mortgage itself.

For example, you could:

• review your monthly fixed costs

• reorganize your insurance

• adjust the timing of replacing your car

• think about how to prepare for education expenses

• Postponing periods of major expenses

and other such methods.

Even if the trigger is a rise in mortgage interest rates, you do not need to limit your solutions to the mortgage itself.

Rather than reducing your mortgage payment by 5,000 yen per month, it may be more effective to improve another area of your household budget by 10,000 yen per month.

What is important is not “what to do about the mortgage,” but continuing to make repayments without strain while protecting the life your family desires as much as possible.

If you are anxious about rising interest rates, first try reviewing your entire household budget

When mortgage interest rates rise, it is natural to think about measures specifically for the mortgage.

However, what I wanted to convey most in this article is that before that, I want you to look at your entire household budget.

It is important not to remain in a state of “vague anxiety”

The biggest waste is spending years carrying anxiety, wondering, “Will I be able to keep paying this off?”

If you visualize your future finances,

“It might actually be fine as it is”

might be the case.

Conversely, you might realize, “It looks a bit tight only during the period eight years from now when education expenses overlap.”

Either way, you will have taken a step forward from the state of carrying anxiety without knowing the facts.

Change “vague anxiety” into “understanding and preparation.”
If you identify problems early, you have that much more time to take countermeasures.

First, try creating a life plan table to organize your future finances

You are welcome to create a life plan table yourself.

As a first step, it is also a good idea to try it yourself using free tools such as the Financial Services Agency’s Life Plan Simulator.

However,

“It seems like a hassle to make it myself.”

“I’m not confident that the numbers are correct.”

“I want to consult on not just my mortgage, but also education expenses and retirement all at once.”

If you feel this way, please try utilizing an FP consultation.

A mortgage is something you will be dealing with for the next 20 or 30 years.

Instead of seeing the current rise in interest rates as a reason to rush into changing your mortgage, try using it as an opportunity to review your future household finances.

If you find out that “everything is fine as it is,” you might be able to enjoy your time more now without having to force yourself to save money.

Even if a problem is found, if you discover it early, you will have time to prepare.

“Mortgage interest rates are rising, and I’m a bit worried about the future…”

If you feel this way, why not take a moment to organize your future finances?

After filling out the form, you can even schedule your appointment online/
Request a life plan creation with a Money Coach ▶