MBA Japan

Mortgages in Japan


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Mortgages in Japan market have developed radically in the last 30 years, according to a report in the Journal of Economic Perspectives. Japan, being an industrial nation, has the second biggest mortgage market along with the following mentioned Asian nations. Bank lending still dominates, and banks provide mostly adjustable-rate mortgages or short-term (typically three-year) fixed-rate loans. For these reasons, the mortgage market as percentage of Gross Domestic product in Japan has achieved a 40.3 %.

The follow table shows the mortgage GDP ratio of some selected economies in Asia.

Nation % GDP(Gross Domestic Product)
Japan 40.3%
Hong Kong 37.6%
Singapore 35.9%
Korea 12.6%
China 10.0%

Japan's decade-long banking crisis has generated a considerable number of difficulties in the mortgage market, resulting in a substantial drop in land and home prices. Thus, a great deal of money is tied up in difficulty loans, representing a severe misallocation of resources in the Japanese economy. However, in recent studies it has been seen that Japan is reorganizing its housing finance institutions by redefining the function for the public sector.

How to obtain a mortgage loan in Japan?

In the current economic circumstances, this has become quite complicated for the Japanese population itself. Unnecessary to say that alien residents in Japan will have an even tougher time. It is vital to have a (Japanese) guarantor, financially appropriate to pay back your loan on your behalf in case you defaulted.

If you are an alien resident you might have higher possibilities of getting a loan if:

  • You have been living in Japan for some time (a few years) and can speak Japanese.
  • You have family in Japan. Being married to Japanese or having children attending Japanese schools, for instance.
  • You have a stable job in Japan, which you are likely to continue for a long period (at least as long as the term of the loan)
  • You have a good credit history.
  • You have no intention to return to your country before you can pay off their loan (although difficult to prove)
  • You have good reasons to want to stay in Japan; you are comfortable with and well-adapted to Japanese lifestyle, etc.
Instead of banks, it might be easier to obtain a loan at a Public Housing Loan Corporation, which specializes in mortgages. However, their interest rates are a bit more elevated than banks.

Mortgage Companies

SBI Mortgage Co., Ltd

SBI Mortgage Co., Ltd SBI Mortgage Co., Ltd was founded in May, 2001. This is the first mortgage banker, which introduced to Japanese homeowners Fixed-Rate Mortgage, backed by privately-structured RMBS. In addition, SBI Mortgage offers a variety of consulting services to homeowners. For example, with brokerage contracts with 12 lending institutions, SBI Mortgage will give its clients advice on what is the best mortgage option for them. Its clients can get an advice on not only SBI Mortgage's own loan products but also the others'

Website: SBI Mortgage Co., Ltd

The Mortgage Corporation of Japan, Ltd.

The Mortgage Corporation of Japan, Ltd. Mortgage loan related business, mortgage loan services, and sale of life and nonlife insurance products.

Website: The Mortgage Corporation of Japan, Ltd.

IFG Asia

IFG Asia IFG Asia has supported many Japan based clients to secure a loan in Japan. IFG Asia can improve your possibilities of finding a loan by our very careful submission procedure and understanding of the bank's requirements and concerns over lending to foreign nationals.

Website: IFG Asia

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