Basis Points to Percentage Calculator

How it works

A basis point (bps, pronounced "bips") is one-hundredth of a percentage point. So 1 bps = 0.01%, 100 bps = 1%, and 10,000 bps = 100%. Basis points are used in finance to avoid ambiguity when discussing small changes to interest rates. Saying "the Bank of England raised rates by 25 basis points" is unambiguous; "the rate rose by 0.25%" means the same thing.

The formula

Why this works: The word "basis" comes from the base point used when calculating spreads between two rates. Using basis points removes any ambiguity about whether "a rise of 1%" means an absolute 1 percentage point change or a 1% relative change.

Worked examples

When to use this

• Reading financial news: The Bank of England, financial press and bond markets all quote rate changes in basis points. Converting to a percentage helps non-specialists understand the real-world impact.
• Comparing mortgage deals: When a lender quotes a spread above SONIA or the base rate in basis points, this converter instantly tells you the all-in percentage rate.
• Evaluating investment fund costs: AMC (annual management charge) and OCF (ongoing charges figure) are sometimes expressed in basis points, particularly for institutional share classes.
• Derivatives and bonds: Credit default swap spreads, bond yield movements and swap rates are all quoted in basis points by traders and analysts.

Understanding the result

Small basis point changes can have significant cash impacts on large portfolios. A 25 bps change on a £500,000 mortgage is £1,250 per year. On a £10m bond portfolio, 25 bps represents £25,000 annually.

Basis points only represent absolute changes in percentage terms, not relative changes. A rate rising from 2% to 2.5% is a 50 bps rise but a 25% relative increase. Context matters when interpreting the result.

Related concepts

➡ To calculate the absolute pound impact of a basis point change on a loan or investment, use the percentage of a number calculator to find what any rate represents in cash terms. ➡ When comparing two interest rates expressed as percentages (rather than basis points), the percentage points calculator finds the absolute difference between any two percentage figures. ➡ For working out how mortgage rate changes affect your equity position over time, see the equity percentage calculator for property equity and LTV calculations.

How to do this in Excel

Put your basis points value in A1 and divide by 100 for the percentage. Or enter a percentage and multiply by 100 for basis points. Format the percentage cell as a number to 4 decimal places.

How to do this without a calculator

Divide basis points by 100 to get the percentage. Move the decimal point two places to the left: 75 bps becomes 0.75%. To go the other way, multiply the percentage by 100: 1.25% becomes 125 bps.

Common mistakes

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