Basis Points Calculator
Convert basis points to percent and decimals (and back), measure the gap between two rates in bps, and see what a 25, 50 or 100 bps move does to a loan payment, fund fee or interest bill. One basis point is 0.01%.
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Loan balance, savings or assets the rate applies to.
Use a minus sign for a cut, e.g. -50.
How to use the Basis Points Calculator
- Pick a mode: convert a value, compare two rates, or see the effect on a loan or a fee.
- Enter the numbers: a bps, percent or decimal value, or the old and new rates, or a balance with its rate and the change in bps.
- Use a minus sign for cuts, for example −25 bps for a quarter-point rate cut.
- Read the result and the formula steps, then check the table for other rate moves.
- Copy or download the results and table as CSV.
Basis point formulas
- Percent = basis points ÷ 100 (75 bps = 0.75%)
- Basis points = percent × 100 (2.4% = 240 bps)
- Decimal = basis points ÷ 10,000 (75 bps = 0.0075)
- Rate change in bps = (new rate % − old rate %) × 100
- Money effect per year = balance × bps ÷ 10,000
Example: a central bank raises its policy rate from 4.25% to 4.50%. The change is (4.50 − 4.25) × 100 = +25 bps. On a $40,000 variable-rate balance that adds 40,000 × 25 ÷ 10,000 = $100 of interest per year.
Where you will see basis points
| Context | Typical quote | What it means |
|---|---|---|
| Central bank rate decisions | "cut by 25 bps" | Policy rate lowered by 0.25 percentage points |
| Mortgage and loan pricing | "prime + 150 bps" | Your rate is the prime rate plus 1.5% |
| Bond yields and spreads | "spread of 120 bps over Treasuries" | The bond yields 1.2% more than a comparable Treasury |
| Fund expense ratios | "3 bps" or "75 bps" | 0.03% or 0.75% of the invested amount each year |
| Advisory and wrap fees | "100 bps on assets" | 1% of the account value per year |
| Card and payment fees | "interchange + 30 bps" | An extra 0.30% of each transaction |
Tips
- Do not confuse "the rate rose 1%" (could mean 1 percentage point = 100 bps) with "the rate rose by 1 percent of itself" (5% × 1.01 = 5.05%, only 5 bps).
- Small bps differences add up on large balances and long terms: a 10 bps lower fee on $500,000 saves $500 every year before compounding.
- A loan payment does not change in a straight line with the rate, so use the loan mode rather than multiplying the balance by the bps change.
Frequently asked questions
What is a basis point?
A basis point (bp or bps) is one hundredth of one percentage point: 1 bp = 0.01% = 0.0001 as a decimal. 100 basis points equal 1 percentage point.
How much is 25 basis points?
25 basis points are 0.25%, or a quarter of a percentage point. On a $100,000 balance, 25 bps is $250 of interest or fees per year.
How do I convert basis points to percent?
Divide the basis points by 100. For example 150 bps ÷ 100 = 1.5%. To go from percent to bps, multiply by 100: 0.35% × 100 = 35 bps.
Why do banks and investors use basis points instead of percent?
Basis points remove ambiguity. A rise from 5% to 5.5% is 50 bps, while saying the rate rose 10% could be read as a relative change. Bps always describe the absolute difference between two rates.
What is the difference between basis points and percent change?
Basis points measure the absolute gap: 4% to 5% is +100 bps (+1 percentage point). The relative percent change is (5 − 4) ÷ 4 = 25%. This calculator shows both.
How much does a 50 bps rate increase change a mortgage payment?
It depends on the balance and term. On a $300,000 30-year loan, going from 6.5% to 7.0% raises the principal and interest payment from about $1,896 to about $1,996, roughly $100 more per month.
What does an expense ratio in bps mean?
Fund fees are often quoted in bps. An expense ratio of 20 bps is 0.20% per year, which is $20 for every $10,000 invested.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.