Low Interest Rates on Japanese Mortgages
In March of 2016, the Bank of Japan introduced negative interest rates in an attempt to revitalize the Japanese economy. The main reason for this was to encourage banks to lend, prompt businesses and savers to spend and invest. Whilst this wasn’t good news for anyone with savings to deposit, it is great news for anyone interested in purchasing property.
The competition for banks to gain customers is intense and many are offering extremely good packages. For example, the Government-guaranteed Flat 35 loans are down to an average of 1.25 percent for mortgages of up to 35 years. Some banks are further reducing their Flat 35 rates to even less than 1 percent.
As of writing this report three of Japan’s major banks lowered interest rates on their 10-year fixed rate homes loans in January. The Bank of Tokyo-Mitsubishi UFJ and Mizuho Bank plan to lower interest rates by 0.1 points to 1.15%, while Sumitomo Mitsui Trust Bank will reduce their rate by 0.1 points to 0.9%.
Applying for mortgages is a tricky process especially for those not living in Japan; however, there are other options for investors who want to enjoy the positive benefits of owning property.