What is the 5-year rule?

Standard JP convention for equal-payment floating loans: **the monthly payment is frozen for 5 years after a rate change**. If interest grows beyond the monthly figure, the shortfall accumulates as unpaid interest added to the balance. Toggle this on to freeze the monthly for 60 months after the hike.

What is the 125% rule?

At the 5-year review boundary, the new monthly is **capped at 1.25× the prior monthly**. It prevents a sudden 2–3× jump in monthly payments. Toggle it on (in addition to the 5-year rule) and any computed monthly above 1.25× is held at the cap, with the shortfall logged as unpaid interest.

How is unpaid interest settled?

Practice varies by bank. The most common is a lump sum at the final payment; some banks spread the shortfall across the new fuller monthly. This tool assumes 'lump sum at final payment'. For large balances, talk to your lender early.

When does the cap actually bind?

Shorter remaining term + larger rate jumps. Example: JPY 30M / 35 years / 1.0% → 3.0% after 5 years: amortising JPY 26.6M over 30 years at 3% needs ~¥112k/month, which is 1.33× the original ¥84k → capped at ¥105k.

What if I turn off the 5-year rule?

The monthly payment switches to the post-hike value at the hike month itself (which is NOT how most JP banks operate, but useful for worst-case monthly impact or for equal-principal contracts that don't have the 5-year freeze).

Floating-rate loans actually adjust every 6 months. Modelling that exactly would require a long rate-path input. This tool stays simple — pick the single worst-case 'rate steps up' moment. Run it multiple times with different timings to explore scenarios.

Can I combine this with prepayments?

Not in this tool. Use mortgage-prepay-jp for the prepayment side; treat the post-hike rate from here as the new annual rate there.

Is my input uploaded?

No. Everything runs in your browser — loan figures never leave the device.

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Floating-rate mortgage simulator — 5-year / 125% rule support

Simulate a 'rate hike at year X to Y%' scenario for a Japanese floating-rate mortgage. Enter the original rate, term, hike timing, and post-hike rate to compare the no-hike baseline against the post-hike scenario — monthly payment, total interest, total paid. The 5-year rule (monthly payment frozen for 5 years after the hike) and the 125% rule (the new monthly is capped at 1.25× the previous monthly at the 5-year review) are optional toggles, with any resulting unpaid interest surfaced separately. Runs entirely in your browser — loan figures never leave the device.

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How to use

Enter principal, initial annual rate, term (1–50 years), the post-hike rate, and the hike timing (years after origination). Optionally toggle the 5-year rule and the 125% rule, then click Run scenario to see (1) the no-hike baseline, (2) the post-hike scenario, (3) deltas for monthly payment, total interest, total paid, and (4) any unpaid interest. A red note appears when the 125% cap is binding.

FAQ

What is the 5-year rule?: Standard JP convention for equal-payment floating loans: **the monthly payment is frozen for 5 years after a rate change**. If interest grows beyond the monthly figure, the shortfall accumulates as unpaid interest added to the balance. Toggle this on to freeze the monthly for 60 months after the hike.
What is the 125% rule?: At the 5-year review boundary, the new monthly is **capped at 1.25× the prior monthly**. It prevents a sudden 2–3× jump in monthly payments. Toggle it on (in addition to the 5-year rule) and any computed monthly above 1.25× is held at the cap, with the shortfall logged as unpaid interest.
How is unpaid interest settled?: Practice varies by bank. The most common is a lump sum at the final payment; some banks spread the shortfall across the new fuller monthly. This tool assumes 'lump sum at final payment'. For large balances, talk to your lender early.
When does the cap actually bind?: Shorter remaining term + larger rate jumps. Example: JPY 30M / 35 years / 1.0% → 3.0% after 5 years: amortising JPY 26.6M over 30 years at 3% needs ~¥112k/month, which is 1.33× the original ¥84k → capped at ¥105k.
What if I turn off the 5-year rule?: The monthly payment switches to the post-hike value at the hike month itself (which is NOT how most JP banks operate, but useful for worst-case monthly impact or for equal-principal contracts that don't have the 5-year freeze).
Why only one hike?: Floating-rate loans actually adjust every 6 months. Modelling that exactly would require a long rate-path input. This tool stays simple — pick the single worst-case 'rate steps up' moment. Run it multiple times with different timings to explore scenarios.
Can I combine this with prepayments?: Not in this tool. Use mortgage-prepay-jp for the prepayment side; treat the post-hike rate from here as the new annual rate there.
Is my input uploaded?: No. Everything runs in your browser — loan figures never leave the device.

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