In January, several of Japan’s major retail banks will increase the interest rates on their home loans.

The Bank of Tokyo-Mitsubishi UFJ will increase the prime interest rate on their 10-year fixed rate home loan by 0.05 points to 0.65%. This is their first rate increase in four months. Sumitomo Mitsui Trust Bank will increase their 10-year fixed rate by 0.05 points to 0.50%. Their 10-year rate reached a low of 0.35% in August 2016. Resona Bank and Mitsui Sumitomo Banking Corporation will increase their rates by 0.05 points to 0.90% and 0.85%. 

Mitsubishi UFJ and Sumitomo Mitsui Trust Bank will also increase the interest rates on their 5-year fixed rate home loans by 0.05 ~ 0.10 points, but will leave the rates on their variable and short-term fixed rate home loans as is.

Mizuho Bank have plans to increase their 10-year rate by 0.05 points to 0.85% in January, after increasing the rate by 0.1 points in December.

The 35-year fixed-rate ‘Flat 35’ base interest rate will also increase this month by 0.02 points to 1.12%. This is the second month in a row to see an increase. Flat 35 interest rates were as high as 3.0% in early 2009.

Fixed-term interest rates offered by Japanese banks tend to follow movements of the long-term government bond yields. In December 2016, Japan’s 10-year bond yields have risen into positive territory for the first time since March. If bond yields continue to rise, fixed-rate home loan interest rates are also expected to increase.

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Sources:
Jiji Press, December 29, 2016.
TV Asahi, December 30, 2016.
NHK, January 4, 2017.