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Japan’s ultra-low mortgage rates to rise for the first time in 17 years

Japan’s ultra-low mortgage rates to rise for the first time in 17 years

Posted on August 1, 2024   |  

The Bank of Japan is set to increase interest rates for the first time in nearly 20 years, impacting personal mortgages.

This move will be the first hike in borrowing costs for homebuyers in over a generation.

Mitsubishi UFJ Financial Group, Japan's largest bank, plans to raise its short-term prime rate in September, following the Bank of Japan's decision.

Other banks are likely to implement similar rate increases.

About 75% of personal mortgages in Japan are floating-rate loans tied to the short-term prime rate.

Unlike other countries, Japan's mortgage rates have been low due to competition and the central bank’s negative interest-rate policy.

The rate hike may affect the housing market, where Tokyo has seen rising prices for new condos due to a weak yen, low supply, and a shortage of construction workers.



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