Banks to increase home loan interest rates in June

Several of Japan’s retail banks will increase the interest rates on their home loans this month.

Both the Bank of Tokyo-Mitsubishi UFJ and Mitsui Sumitomo Banking Corporation will increase the prime interest rate on their 10-year fixed rate home loans by 0.05 points to 0.75% and 1.05% respectively. Mizuho Bank will leave their rates at 0.85%.

Sumitomo Mitsui Trust Bank and Resona Bank will also increase their home loan rates by 0.05 points.

The 35-year fixed-rate ‘Flat 35’ base interest rate will also increase this month for the first time in 3 months. The minimum fixed interest rate on a 21 ~ 35 year loan with an LTV of below 90% and a loan amount of less than 80 million Yen will increase by 0.03 points to 1.09%. Flat 35 interest rates were as high as 3.0% in early 2009.

10-year fixed rate home loans closely follow movements in the 10-year government bond yield.

Sources:
The Nikkei Shimbun, May 31, 2017.
NHK, June 1, 2017.