As the Bank of Japan's rate hikes gather pace, repayments on mortgages taken out at ultra-low interest rates are expected to rise, and refinancing and early repayment are reportedly being considered as measures to address the situation.
The Bank of Japan's rate hikes are accelerating, with the latest policy rate having been raised by a total of 0.75% in increments of 0.25%, and further rate hikes expected within the year. Because the timing of reviews varies from bank to bank, the timing of the impact on actual borrowing rates is expected to differ.
Even if a rate hike occurs before the review month, it may not be fully reflected, and the timing of the impact of the Bank of Japan's rate hike is explained to vary from bank to bank. As a result, the benchmark rate in April 2027 may be raised.
According to an estimate based on short-term interest-rate trends, if ¥50 million is borrowed for 35 years in October 2022 and the interest rate rises to 2.5% in October 2027, monthly repayments are expected to increase from approximately ¥130,000 to approximately ¥170,000, while total repayments change from approximately ¥54.513 million to approximately ¥61.705 million.
The outlook assumes a policy rate of 1.5% at the end of 2026, 1.75% in March 2027 and 2.0% in June 2027, and further 0.25% rate hikes may be repeated for the time being, according to reports.
Whether to implement further rate hikes after the rate reaches 2% is expected to be considered during 2027, with forecasts reportedly based on actual transaction results at financial institutions.