5 Major Japanese Banks Raise Housing Loan Rates

Five leading Japanese banks announced sharp increases in the interest rate for fixed-rate mortgages to be offered to new home buyers from January, Takehiro Tomoda and Ryoko Takahashi reported for Asahi Shimbun.

Photo Insert: The higher interest rates were announced Dec. 30 by MUFG Bank Ltd., Sumitomo Mitsui Banking Corp., Mizuho Bank Ltd., Resona Bank Ltd., and Sumitomo Mitsui Trust Bank Ltd.

The move follows a Dec. 20 decision by the Bank of Japan to double the upper limit of the 10-year yield for government bonds from 0.25 percent to 0.5 percent. The interest rate for 10-year fixed-rate mortgages will increase from the rate offered in December by between 0.1 percentage point to 0.34 percentage point.

The higher interest rates were announced Dec. 30 by MUFG Bank Ltd., Sumitomo Mitsui Banking Corp., Mizuho Bank Ltd., Resona Bank Ltd., and Sumitomo Mitsui Trust Bank Ltd.

Some banks will raise their interest rates from January to a level that exceeds the total increase over the entire year now coming to an end.

For example, MUFG Bank and Sumitomo Mitsui Banking over the course of 2022 increased their interest rates for fixed-rate mortgage products by a total of 0.13 percentage points.

But the increase in January will be 0.18 percentage points at MUFG Bank and 0.26 percentage points at Sumitomo Mitsui Banking. The latest move will not affect people who already have fixed-rate housing loans or those considering purchasing new homes through variable-rate mortgages.

The five banks are keeping the interest rate for the variable-rate mortgages unchanged. About 70 percent of those who sign contracts for housing loans choose the variable-rate mortgage option.

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