Flat 35 Home Loan Report for 2018

On July 12, the Japan Housing Finance Agency released its annual report on Flat 35 home loans. The report gives us a look at what type of homes people are buying and how much they are spending on them. Let’s take a look at some of the interesting changes in borrowing that have taken place over the past 10 years.

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What happens to your home loan if your house is destroyed in a natural disaster?

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

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Home loan rates to rise this month

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.

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Mizuho to offer home loans for same-sex couples

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.

Sources:
Jiji Press, July 6, 2017.
Mizuho Bank News Release, July 6, 2017.

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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%.

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Home loan interest rates to rise in January

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%.

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Home loan interest rates set to rise this month

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%.

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