January 31: Japan Mortgage Rates Rise as Big 5 Lift Fixed Loans
Japan mortgage rates moved higher for February as the five mega banks lifted 10-year fixed mortgage rates by 0.07–0.33 percentage points to 2.75–3.175%. The move tracks the 10-year JGB yield, which is near a 27-year high. Variable rates stay unchanged for February, but banks could revise short-term prime rates by spring. We explain what changed, why it happened, and how borrowers and property investors in Japan can plan their next steps.
What changed in February and why
Japan’s five major banks raised 10-year fixed mortgage rates by 0.07–0.33 percentage points, setting headline levels around 2.75–3.175% for February. The increase follows a steady climb in funding costs. Local media reported broad moves across the mega banks, tightening terms for new borrowers and refinancers. See coverage from Nikkei for context source.
Banks price multi‑year fixed mortgage rates off long‑term funding benchmarks, especially the 10-year JGB yield. With that yield near a 27-year high, lenders passed higher costs to customers, pushing up Japan mortgage rates. Variable rates were held for February, but the stance may shift if short‑term benchmarks rise this spring source.
Impact on homebuyers and investors
Higher fixed mortgage rates lift monthly payments. On a ¥35,000,000 loan over 35 years, payments per ¥10,000,000 rise from about ¥37,373 at 2.80% to ¥39,460 at 3.175%. That is roughly ¥7,305 more each month for ¥35,000,000. If a borrower moves only to 3.00%, the increase is about ¥1,103 per ¥10,000,000, or ¥3,861 for ¥35,000,000. Japan mortgage rates now matter more for budgeting.
For buyers, a quick preapproval and a rate hold can protect against further increases. Consider shorter fixed periods if you can handle reset risk, or a mix of fixed and variable. Investors should recheck cap rates and debt service coverage. Even small changes in fixed mortgage rates can shift net yields on housing loans Japan and narrow deal margins.
What to watch next
Variable mortgage rates stayed unchanged for February, but banks could adjust short‑term prime rates by spring. Watch bank announcements and funding costs. If prime rates rise, monthly payments on floating loans will increase. Borrowers on variable plans should stress test budgets, consider partial prepayment, or lock a portion into fixed terms while Japan mortgage rates remain predictable.
Keep an eye on the 10-year JGB yield, auction demand, and central bank operations. Strong wage data or sticky inflation could keep long‑term yields elevated, pressuring fixed mortgage rates. If yields ease, lenders may stabilize pricing. For housing loans Japan, a steady bond market would give buyers more clarity on timing and product choice.
Final Thoughts
Japan mortgage rates moved higher as the Big 5 raised 10-year fixed offers to 2.75–3.175%, reflecting long‑term yield pressure. Variable rates are steady for February, but spring brings risk of higher short‑term prime rates. Buyers should secure preapprovals, compare fixed tenors, and run payment scenarios at slightly higher rates. Investors need to recheck yields and debt coverage under new terms. Monitoring the 10-year JGB yield will be key for timing. If you plan to borrow soon, request multiple bank quotes on the same day and keep documents ready to lock favorable terms quickly.
FAQs
Why did Japan mortgage rates rise in February?
Lenders lifted 10-year fixed mortgage rates because long-term funding costs increased. The 10-year JGB yield is near a 27-year high, and banks pass that higher cost to borrowers. Variable rates were left unchanged for February, but may adjust by spring if short‑term benchmarks move.
How much did fixed mortgage rates increase?
The Big 5 raised 10-year fixed mortgage rates by about 0.07–0.33 percentage points, setting typical offers near 2.75–3.175%. The exact rate you receive will depend on your credit, loan‑to‑value, and the bank’s campaign pricing when you apply.
Are variable mortgage rates in Japan also rising now?
Not for February. Major banks kept variable mortgage rates unchanged this month. That said, if banks revise short‑term prime rates by spring, floating loan repayments could increase. Borrowers on variable plans should review budgets and consider partial fixes to manage potential payment changes.
How do higher rates affect monthly payments?
Payments rise as rates increase. For example, per ¥10,000,000 over 35 years, monthly payments are about ¥37,373 at 2.80%, ¥38,476 at 3.00%, and ¥39,460 at 3.175%. Scaling that to a ¥35,000,000 loan adds around ¥3,861 to ¥7,305 per month, depending on the new rate.
What should homebuyers in Japan do now?
Get preapproved, compare quotes across several banks on the same day, and ask about rate locks. Consider a mix of fixed and variable if you can manage reset risk. Run stress tests at slightly higher rates and keep cash buffers for taxes, insurance, and maintenance.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
