For many years, one advantage of financing a property purchase in Japan was access to mortgage rates that were exceptionally low by international standards. Variable-rate home loans below 1% were common, while even long-term fixed borrowing remained relatively inexpensive.
The Bank of Japan ended its negative interest rate policy in 2024 and has gradually raised its policy rate since then. In June 2026, the Bank raised the short-term policy rate to around 1.0%, where it remained following its July meeting.
Japanese mortgage rates have moved higher alongside those changes, although variable and fixed rates have not increased at the same pace.
There is also no single “mortgage rate in Japan.” The rate available to an individual borrower will also depend on the bank, mortgage product, down payment, property, income, and other lending criteria.
In this guide, we share different types of mortgage rates available in Japan, current mortgage rates, and what foreign residents should expect when financing a property purchase.
Types of Mortgage Rates in Japan
Most residential mortgages in Japan fall into three broad categories: variable-rate mortgages, fixed-period mortgages, and full-term fixed mortgages.
Variable-Rate Mortgages
A variable-rate mortgage, or hendō kinri (変動金利), has an interest rate that can change during the life of the loan.
These mortgages generally offer the lowest initial rates in Japan. Some major banks still advertise preferential variable rates starting below 1%, even though the Bank of Japan’s policy rate has risen to 1.0%.
Variable mortgage rates are generally influenced by short-term interest rates and the short-term prime rates set by Japanese banks. When those rates increase, banks can revise the underlying rate used to calculate variable-rate mortgages.
Different lenders have their own rules for when a new interest rate applies to existing borrowers.
Mizuho, for example, states that borrowers taking a loan at 1.025% by September 30, 2026 will see a rate of at least 1.275% applied from their January 2027 repayment after its August short-term prime rate revision.
Some Japanese variable mortgages also use what are commonly called the five-year rule and 125% rule.
Under the five-year rule, an increase in the interest rate does not immediately increase the monthly payment on a standard equal-payment mortgage. Instead, more of the existing payment goes toward interest and less goes toward reducing the principal.
When the monthly payment is eventually recalculated, the 125% rule can limit the new payment to no more than 125% of the previous amount.
These rules soften sudden changes in monthly cash flow, but they do not remove the additional interest created by a higher rate. In some circumstances, principal or unpaid interest can be pushed further into the repayment schedule.
The Ministry of Land, Infrastructure, Transport and Tourism specifically advises borrowers to check whether their lender uses the five-year and 125% rules, because some mortgage products do not.
The Japanese Bankers Association said in June 2026 that approximately 80% of existing mortgage users were using variable-rate loans.
Fixed-Period Mortgages
A fixed-period mortgage allows you to fix your interest rate for an agreed period, commonly three, five, 10 or 20 years.
During that period, your interest rate and scheduled repayments do not change, even if market rates increase.
Once the fixed period ends, however, the loan does not remain fixed at the original rate. Depending on the mortgage, you may move onto a variable rate or choose another fixed period using the rates available at that time.
A 10-year fixed mortgage should therefore not be confused with a mortgage that is fixed for its entire 35-year term.
Fixed-period mortgages can offer a middle ground for someone who wants more certainty over the next several years without paying for a full-term fixed mortgage.
Full-Term Fixed Mortgages and Flat 35
With a full-term fixed mortgage, the interest rate is set when the loan begins and remains fixed until the loan is repaid.
Japanese banks offer their own full-term fixed products, but the best-known option is Flat 35, a mortgage provided by private financial institutions in partnership with the Japan Housing Finance Agency.
Flat 35 can provide a fixed interest rate for up to 35 years. Because the rate does not change after borrowing, the borrower knows the scheduled repayment amount from the beginning of the mortgage.
In August 2026, the most common Flat 35 rate for a 21- to 35-year mortgage was 3.29% for loans with a loan-to-value ratio of 90% or less and the standard JHF group credit life insurance.
Certain households and qualifying properties can receive temporary interest-rate reductions through Flat 35’s point-based programs.
At current rates, that represents a substantial premium over the preferential variable rates available from many Japanese banks. In return, the borrower is protected from future increases in mortgage rates for the entire loan term.
Current Mortgage Rates in Japan in 2026
Mortgage rates vary significantly between lenders and products, so comparing a single national “average mortgage rate” is not particularly helpful.
The table below gives examples of rates being advertised for new residential mortgages in 2026.
| Lender or product | Variable rate | 10-year fixed / comparable fixed rate |
|---|---|---|
| MUFG | 0.945% | 3.59% |
| Mizuho Bank | 1.025% | 3.35% |
| Sumitomo Mitsui Banking Corporation | 0.975%–1.275% depending on plan | 3.65%–4.40% depending on plan |
| Resona Bank | 0.950% | 3.795% |
| Flat 35 | — | 3.29% most common rate for 21–35 years, full-term fixed |
These are advertised or preferential rates for particular products and should not be treated as guaranteed rates for every borrower.
One reason Japanese mortgage rates can be confusing is that banks frequently publish both a standard or base rate and a substantially lower preferential rate. The discount applies according to the product terms.
For this reason, a headline such as “Japan’s mortgage rate is 1%” can be misleading. It may describe the rate available to a strong borrower using a preferential variable product, but it tells you very little about a buyer considering a 10-year fixed mortgage, Flat 35, or a mortgage from a lender with different eligibility requirements.
The lowest advertised rate is also not necessarily the lowest-cost loan. Administrative fees, guarantee fees and group credit life insurance can vary between products.
Some banks offer a lower rate in exchange for a larger upfront administrative fee, while another plan may have a higher interest rate but a much smaller initial fee.
For example, SMBC Trust Bank PRESTIA offers one pricing structure with an administrative fee equal to 2.2% of the loan amount and another with an administrative fee of ¥22,000, with different interest-rate discounts attached to each.
Can Foreigners Get the Same Mortgage Rates in Japan?
Foreign residents can get mortgages in Japan, but there is no single “foreigner mortgage rate.” The larger difference is usually which lenders and mortgage products a borrower is eligible to use.
Foreign residents with permanent residency generally have access to a much broader range of mainstream Japanese mortgage products. If they meet the bank’s income, employment, credit, and property requirements, they may qualify for the same mortgage products and preferential rates offered to Japanese borrowers.
However, some banks specifically lend to foreign residents without PR.
SMBC Trust Bank PRESTIA states that permanent residency is not required for non-Japanese mortgage applicants. Applicants must live in Japan, excluding short-term visa holders, be able to communicate in English and/or Japanese, and generally have stable income with annual income exceeding ¥10 million in the previous fiscal year.
Tokyo Star Bank also offers a dedicated Star Mortgage for non-permanent residents. Eligibility requires living and working in Japan, meeting minimum employment and income requirements, and passing the bank’s property and credit assessment.
The bank also states that borrowers who later receive permanent residency may qualify for improved interest-rate terms after screening.
Products aimed specifically at non-PR borrowers can be considerably more expensive than the lowest preferential rates advertised by the major banks. They can also have different administrative fees, insurance requirements and borrowing limits.
Foreign nationals applying for Flat 35 must have permanent resident or special permanent resident status. A work visa or other long-term residence status by itself does not satisfy the program’s foreign-national eligibility requirement.
The mortgage rate available to a foreign buyer can therefore depend on several factors beyond nationality, including residency status, income, employment history, time in Japan, down payment, the property being financed and the lender.
For someone purchasing a higher-value property in Tokyo, it can be useful to establish likely mortgage eligibility before treating the lowest rate advertised by a Japanese bank as part of the purchase budget.
Buying Property in Japan
Japan mortgage rates are lower than in many overseas markets, particularly for buyers who qualify for preferential variable-rate products.
If you are planning to buy a home in Tokyo, Tokyo Portfolio can help you find properties that fit your requirements and guide you through the purchase process, including the financing considerations that can affect your search.
Whether you are already a permanent resident, buying while on another residence status, or considering how much property makes sense at current mortgage rates, our team can help you understand the options available before you make an offer.
