Is X-Day Near?” Must Read for Mortgage Loan Users! Megabanks and Fixed Type will be raised… What will happen to [Variable Rate]?

Since the Bank of Japan’s monetary policy meeting held in January, it has been widely believed that the “negative interest rate policy” will be lifted as early as March. As a result, long-term interest rates have risen, and fixed mortgage rates at megabanks have been raised, albeit slightly. So what will happen to [variable interest rates], which are used by more than 70% of mortgage borrowers?　Experts explain.

10-year fixed rate” has already been raised.

On January 31, the Bank of Japan released the “main opinions” from its Monetary Policy Meeting. It is said that “a number of participants expressed a positive attitude toward a change in the Bank’s large-scale monetary easing policy,” and speculation of a change in monetary policy is suddenly gaining momentum.

Financial markets reacted to this, and long-term interest rates rose slightly. In response, Sumitomo Mitsui, Mizuho, and Resona each raised their 10-year fixed mortgage rates in February, as 10-year fixed mortgage rates are linked to long-term interest rates. The long-term interest rate here refers to the yield on 10-year JGBs with a remaining maturity of approximately 10 years.

On the other hand, variable interest rates, which are used by far the most, do not move at all, because they are determined by a different mechanism than 10-year fixed-rate or fixed-rate for the full term. First, let’s review the mechanism.

Floating interest rates are linked to the “short-term prime rate.

Floating interest rates on mortgages are linked to the “short-term prime rate” (hereafter referred to as the “short-prime rate”). To be precise, it is the “base interest rate” that is linked. If the base interest rate rises, the “applicable interest rate,” which is the actual borrowing rate, will also rise.

Short-Pla is the most preferential lending rate for short-term loans of one year or less made by financial institutions to companies. In the case of loans to individuals, it is also the standard for automobile loans and education loans, in addition to housing loans. Therefore, if the Short-Term Loan Rate is raised, it is highly likely that in the following month, not only the [variable interest rate] for housing loans, but also for auto loans and education loans will be raised.

The Bank of Japan’s policy rate will affect the [short plat

So, under what circumstances would the Short-Pla go up?　Short-term plat is affected by short-term interest rates, but in effect, it is linked to the Bank of Japan’s policy interest rate. This policy rate is the “unsecured overnight call rate. This is the interest rate on ultra-short-term loans maturing in one day, traded in the interbank market, in which only financial institutions participate. Although there are various abbreviations, we will continue the explanation below using “next-day interest rates.

The BOJ sets the guideline level of the next-day interest rate, which is currently -0.1%. The BOJ’s interest rate for the next day fluctuates around the -0.1% level on a daily basis, but the -0.1% guidance level itself remains unchanged unless the BOJ changes its monetary policy. The first step in the BOJ’s policy change is the “lifting of negative interest rates.