A basis point is a unit of measurement used in finance to describe the percentage change in the value of a financial instrument. One basis point is equal to 0.01% or 1/100th of one percent.
For example, if the interest rate on a loan increases from 5% to 5.01%, that is a 1 basis point increase. If the interest rate decreases from 5% to 4.99%, that is a 1 basis point decrease.