Common basis point conversions at a glance. 1 BPS always equals 0.01%.

A basis point (BPS) is one one-hundredth of a percentage point. The simple math: 1 BPS = 0.01% = 0.0001.

Finance professionals prefer basis points because small rate changes can be confusing in plain percentage language. If someone says "the rate went up 0.25%," it is unclear — they could mean 0.25 percentage points, or 25% of the existing rate. Saying "25 basis points" removes that confusion completely.

You will see basis points used in:

• Federal Reserve rate decisions (e.g. "the Fed raised 50 BPS")
• Mortgage and home loan rate quotes
• Bond spreads and yield differences — and related strategies like a put option hedge
• Fund management and advisory fees
• Foreign exchange and currency markets

The annual dollar value of 1 BPS on any loan or investment equals:

Examples for a single basis point:

• $10,000 loan → $1.00 / year
• $100,000 mortgage → $10.00 / year
• $500,000 home loan → $50.00 / year
• $1,000,000 bond → $100.00 / year

When comparing loan offers, a difference of 25 BPS on a $400,000 mortgage means $1,000 per year. Small BPS moves add up on large principals. To see how a rate change affects your overall gain, use the percentage return calculator.

Step 1 — Enter BPS or %: Type a number in either the Basis Points or Percentage field. The calculator converts both directions. You do not need to fill in both.

Step 2 — Add a principal (optional): If you want to see the dollar impact, enter your loan amount, bond face value, or investment size. The calculator will show the annual interest value of your BPS.

Step 3 — Add a starting rate (optional): Enter your current rate (e.g. 6.50%) to see what the new rate becomes after the BPS change.

Step 4 — Click Calculate: Your results appear instantly — percentage, decimal, dollar value, and new rate. Charts appear after your first calculation.