Five of Japan’s mega-banks announced plans to increase the premium interest rate on new home loans with a 10-year fixed rate. These rates will apply to new loans issued in May. Floating interest rates will not change.

Premium 10-year fixed rate:

  • Sumitomo Mitsui Trust Bank: 0.90% (+0.05 points from last month)
  • Resona Bank: 1.00%
  • Mitsubishi UFJ: 1.04%
  • Mizuho Bank: 1.15%
  • Sumitomo Mitsui Banking Corporation: 1.50%

The interest on fixed-rate mortgages follows movements in the bond market, particularly the 10-year yield on government bonds. If those yields rise, this tends to result in an increase in interest rates. The 10-year yield was 0.240% as of April 27, 2022, up from a 0.210% yield at the end of March. The Bank of Japan is maintaining a stimulus program to keep rates low, targeting a 0.25% yield on 10-year government bonds.

In 1990 and 1991, home loan interest rates in Japan were around 8%. In the US, they were up to 10% in 1990, and in Australia they had reached a record high of 17%.

TBS News, April 28, 2022.
Kyodo, April 28, 2022.