Keiyo Bank, headquartered in Chiba City, is rolling out a home loan product with a maximum repayment term of up to 40 years. Up until now, the maximum loan term was 35 years. Although a longer loan term results in higher interest paid in total, the monthly repayments will be slightly less, lowering the bar for younger home buyers to qualify.

The loan will be offered from September 15, 2021, onwards with applications accepted from August 1. 

Loans can range from 1 ~ 100 million Yen (depending on the borrower’s financial position, of course), with borrowers to be aged from 20 ~ 65 at the time of borrowing. The loan term must end by the time the borrower is 80 years old. In other words, a 60-year old borrower could only get a maximum loan term of 20 years.

The loans can be used for the purchase of personal residences or land to build a personal residence on. Interest rates can be variable or fixed at 3, 5, and 10-year periods. For foreign residents, the bank requires the borrower to have permanent residency. 

This product was created by the bank in response to rising home prices in urban centers with the goal of providing manageable monthly mortgage repayments for younger homeowners. The bank also offers home loans for LGBT couples.

This isn’t the longest loan on the market. Some banks also offer Flat 50 home loans for 50-year terms in conjunction with the Japan Housing Finance Agency, however, they have the same requirement that the loan term does not exceed the borrower’s age at 80. In other words, the borrower would have to be aged 30 or under to be eligible for a 50-year home loan.

Source: The Nikkei Shimbun, July 19, 2021.