Home loan rates rise as interest rate hits 6 year high

From the beginning of this month, Japan’s main banks have started to increase interest rates offered on home loans. This is due to the worldwide shift towards reducing monetary easing measures that have been in effect since the start of the pandemic. On January 31, Japan’s long-term interest rate reached 0.185%, the highest level in six years.

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Bank offers 40-year home loans to counteract rising house prices

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.

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Mortgage stress on the rise

The Japan Housing Finance Agency (JHF) is reporting a surge in inquiries from borrowers who are struggling to make home loan repayments in the current crisis. As economic conditions worsen amidst the coronavirus pandemic a growing number of companies are laying off workers or reducing hours and pay. Household finances are being stretched to the limit, putting some borrowers in a precarious situation. 

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Suruga Bank restarts investment lending

According to several real estate companies, Suruga Bank has restarted lending on investment properties. Two years have passed since the bank found itself at the center of questionable lending schemes that saw it providing finance to over 1,200 investors in a wide-spread share house investment scam. The scandal saw the bank slapped with a six month ban on investment lending by the Financial Services Agency.

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