The government has decided to extend the home loan tax deduction program for new home buyers to allow a three-year period whereby a home owner could deduct up to 2% of the building portion of their purchase price from their income tax. This is an effort to help support the housing market this year when the consumption tax rate is scheduled to increase to 10% from October 2019.
ORIX Bank began trialing 45-year loans on investment properties in May 2018, making it the longest property loan on offer in the industry, exceeding the typical maximum term of 35 years.
Generally speaking, if your house is destroyed in a disaster you are still on the hook to make your monthly mortgage repayments. However, this year many of Japan’s major banks have started to offer their new borrowers with some respite from their loan payments in the event of a disaster such as an earthquake, typhoon or flooding.
6 ~ 24 months delayed or exempted loan repayments
Japan’s four leading mega-banks will be increasing their advertised interest rates on home loans this month. When the Bank of Japan introduced minus interest rates in February 2016, retail banks began to gradually reduce their long-term fixed interest rates on home loans. However, recent shifts in monetary easing policy may see home loan interest rates shift to an upwards trend.
Four of Japan’s major banks announced that they will be reducing interest rates on new home loans this month.
The Bank of Tokyo-Mitsubishi UFJ will reduce the prime rate on their 10-year fixed-rate home loan by 0.05 points to 0.75%. Mitsui Sumitomo Banking Corporation, Mizuho Bank and Resona Bank will also reduce the rates on their 10-year fixed-rate loans by 0.05 points. Sumitomo Mitsui Trust Bank will leave their rates at their current level of 0.70%.
Mizuho Bank is now the first bank in Japan to offer home loans for same-sex couples. Up until now, home buyers would have had to obtain a loan under a single borrower’s name where the loan amount was limited by the single borrower’s income.
The home loan product is currently only available to residents in Shibuya Ward who have obtained a same-sex partnership certificate from the Shibuya local government office. The bank is considering expanding the loan to other districts as they begin to recognize LGBT partnerships.
Setagaya ward in Tokyo and Sapporo in Hokkaido also recognize same-sex partnerships. There were 18 certificates issued to couples in Shibuya ward as at March 2017, and 50 issued in Setagaya ward.
Jiji Press, July 6, 2017.
Mizuho Bank News Release, July 6, 2017.
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%.
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%.
Several of Japan’s main banks will be increasing the interest rates offered on their fixed-rate home loans this month.
Mizuho Bank will increase their 10-year fixed interest rate by 0.1 points to 0.80%. This is 0.15 points higher than the historic low of 0.65% reached in August 2016. Sumitomo Mitsui Trust Bank will increase prime rates for 15 ~ 30-year fixed-rate home loans by 0.1 points from last month to 0.85 ~ 0.95%, but will leave their 10-year fixed rates at 0.45%. The Bank of Tokyo-Mitsubishi UFJ will leave their 10-year rate at 0.60%.
On November 25, the Osaka Prefectural Police arrested the president of an Osaka-based real estate company and one of their customers for alleged mortgage fraud.
The police claim that the company boss produced false income certificates that were almost-perfect forgeries of official documents issued by local governments. Of the 190 loans obtained for the company’s clients, 150 were reportedly obtained using forged income documents. The majority of the buyers have been making mortgage repayments without any problems.