Basis Point Calculator
Quickly convert basis points to percentages and see the actual dollar impact on your loan, mortgage, or investment portfolio. One basis point equals 0.01%, so 50 basis points is 0.50%.
A basis point (bp or bps) is one hundredth of a percentage point. The finance industry uses basis points instead of percentages to avoid ambiguity. If someone says a rate "increased by 1%," that could mean from 5% to 6% (100 bps) or from 5% to 5.05% (5 bps). Saying "100 basis points" removes all confusion.
The dollar impact adds up fast on large amounts. A 25 basis point rate increase on a $500,000 mortgage adds $1,250 per year in interest, or about $104 per month. On a $10 million bond portfolio, that same 25 bps represents $25,000 annually.
The Federal Reserve typically moves its benchmark rate in increments of 25 basis points. When you hear "the Fed raised rates by a quarter point," that is 25 basis points. During aggressive tightening cycles, the Fed has moved by 50 or even 75 basis points at a single meeting, and the impact ripples through mortgage rates, savings yields, and bond prices.