The annual interest rate drops by 0. 1%, and the mortgage interest rate drops by 10 basis point, which means that the annual interest rate of mortgage loans drops by 0. 1%. For example, the annual interest rate of the original mortgage was 5.5%. After ten basis points are lowered, the new annual interest rate will become 5.4% (that is, 5.5% to 0. 1%). The basis point is a commonly used unit of interest rate change in finance, and 1 basis point is equal to 0.0 1 percentage point. For the lender, this means that the monthly mortgage repayment amount will be reduced accordingly, depending on the loan balance, remaining loan term and repayment method.