BOJ Rate Hike Sparks Concerns Over Variable Mortgage Burdens

The Bank of Japan (BOJ) has raised its policy interest rate from around 1.0% to around 1.25%, marking the shortest interval since March 2024.

This decision comes three months after the previous increase in June, and is expected to push up variable mortgage rates and deposit rates.

A female office worker in her 50s living in a Tokyo condominium shared her concerns about the impact of this rate hike on her household finances. She borrowed ¥30 million (approximately $190,000) at a variable rate with monthly repayments of ¥69,000 against a monthly income of ¥330,000.

Variable-rate mortgages are highly sensitive to policy rate movements, and borrowers' burdens increase directly during rate-hike cycles.