Five of Japan’s mega-banks will reduce the interest rates on their home loans this month.

The 10-year fixed-term interest rates on home loans for new customers will be reduced between 0.05 to 0.10 points from last month, reaching record lows.

Mizuho Bank will be reduced interest rates by 0.05 ~ 0.10 points on seven of their mortgage products ranging from 2 ~ 20 year fixed-terms.

The 10-year government bond rate has remained at historic lows since the Bank of Japan introduced negative interest rates in January. Fixed-term interest rates offered by banks tend to follow movements of the government bond rate, while variable home loan rates follow short-term lending rates.

Bank 10-year fixed-term rate* Variable rate*
Sumitomo Mitsui Trust Bank 0.35% 0.60%
The Bank of Tokyo-Mitsubishi UFJ 0.50% 0.625%
Mizuho Bank 0.65% 0.60%
Resona Bank 0.65% 0.625%
Sumitomo Mitsui Banking Corporation 0.70% 0.625%

*Prime rates.

Sources:
The Sankei Shimbun, July 29, 2016.
The Nikkei Shimbun, July 29, 2016.

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