Are you curious about the mortgage loan in Japan ?
Few individuals have enough savings or liquid funds to enable them to purchase property outright.
It is normal for home purchases to be funded by a mortgage loan.
A mortgage loan is used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds
for any purpose, while putting a lien on the property being mortgaged.
The home mortgage loan is widely available in Japan, too.
The best referral source for obtaining a foreign national mortgage loan is a local real estate broker that works in Japan.
Having said that, very few Japanese banks are offering a mortgage loan for foreign nationals who are not the permanent resident here.
However, one Japanese bank who is working with us has started offering a mortgage loan for non-permanent residents since 2017.
Here is the outline of mortgage loan by the bank
Eligible borrower
• Japanese nationals or foreign nationals who have received permanent residence permits.
• Foreign nationals who do not receive a permanent residence permit and who meet the following conditions.
-Those who live in Japan.
-Those who can understand the terms and conditions of the Japanese language (including when understood with the help of a spouse or a legal professional).
Those aged 25 to 65 and aged 75 or younger at the time of completion of the repayment.
• Those who can prove stable income of more than one year as a full-time employee or more than two years as a company officer / self-employed
which is proved in the public documents (namely tax return documents)
• More than 6 million yen in taxable annual income
total household income can be acceptable.
In the case of a single-person household, 4 million yen or more in tax annual income is required.
Use of funds
For 1st time purchase
It is the following usage information regarding the residence of the person or family living together.
• Housing construction and renovation
• Purchase of built-for-sale housing (including condominiums)
• Purchase of pre-owned homes (including condominiums)
• Funds for purchasing residential land (but a house must be built within one year)
Refinancing
The following information about the acquired housing for the residence of the person or the family sharing a living.
• Repayment of current mortgage loan (except for our loan)
5 million yen or more and 100 million yen or less
*The purchase price of the property subject to the loan will be the upper limit of the loan (naturally !)
* In addition, conditions may be restricted by annual income or bank collateral evaluation.
Term
More than 1 year and up to 35 years
Interest rate (at time of publishing the article)
Variable interest rates :0.45%
Fixed interest rate : 1.25% fixed for 20 years (can be extended)
Downpayment
To be discussed but usually in the range of 10-20%.
Final Thought
The key factor in determining who is eligible for a mortgage loan is not citizenship. But income and residency are important.
Someone wishing to apply for a mortgage loan for his/her home must have income taxable in Japan.
The command of Japanese is also playing an important role.
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Toshihiko Yamamoto
Real estate investing consultant and author.
Founder of Yamamoto Property Advisory in Tokyo.
International property Investment consultant and licensed
real estate broker (Japan).
He serves the foreign companies and individuals to buy and sell
the real estates in Japan as well as own homes.
He holds a Bachelor’s degree in Economics from
Osaka Prefecture University in Japan
and an MBA from Bond University in Australia
Toshihiko’s book, “The Savvy Foreign Investor’s Guide to Japanese Properties: How to Expertly Buy, Manage and Sell Real Estate in Japan”is now out on Amazon, iBooks (iTunes, Apple) and Google Play.
About the book
Amazon.com Link
