What are Basis Points?

Basis Points in Relation to HUD 221(d)(4) Loans

Basis points are a common measurement to denote changes in interest rates and other financial percentages. 1% change = 100 basis points, and 0.01% = 1 basis point. Conversion:

  • To convert basis points into a percentage, multiply the basis points by 0.0001. For example, to convert 275 basis into a percentage, multiply 275 by 0.0001 which equals 0.0275 or 2.75% (0.0275 x 100).

  • The reverse calculation divides the percent (in decimal form) by 0.0001. For example, if a bond has risen 2.75%, divide 0.0275 (2.75% / 100) by 0.0001 to get 275 basis points.

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