The Bank of Tokyo-Mitsubishi UFJ (MUFG) will begin offering reverse mortgages this month.
While the majority of reverse mortgages in Japan are only based on the value of the land (due to the low value given to older buildings), MUFG’s mortgages can also apply to homes and apartments.
Their target borrowers are between 60 and 80 years old and the maximum loan amount is 15 million Yen.
Borrowers will only make monthly interest payments on the loan with the principal payment deferred until their death. Any debt remaining after the sale of the property must be paid to the Japan Housing Finance Agency by the heirs to the estate.
The reverse mortgages will be offered from February 25 and available from branches in Tokyo, Kanagawa, Saitama and Chiba Prefectures.
In 2013, Mizuho became the first major Japanese bank to introduce reverse mortgages. Unlike MUFG, Mizuho will only lend on homes and land with a minimum value of 20 million Yen.
Source: The Yomiuri Shimbun, February 21, 2014.
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