Japan mortgage rates in October 2026: the figures
Japanese mortgages come in three families. The hendō kinri (hendō kinri, variable rate) follows short-term rates and is reviewed twice a year. The kotei kinri sentaku-gata (kotei kinri選択型, fixed-period rate) locks the rate for 3, 5, 10 or 20 years, then switches to the variable rate or a new fixed period. The zenki kotei (全期間固定, fixed for the full term) never moves: Flat 35 is the best-known example.
The table below gives the rates published for loans drawn in October 2026. They are the best rates each lender advertises for new borrowers with a strong profile, not a promise for every file.
| Loan type | Lender | Rate, October 2026 | What moves it |
|---|---|---|---|
| Variable (lowest advertised) | MUFG Bank | 1.195% | Short-term prime rate, i.e. the Bank of Japan |
| Variable (lowest advertised) | Mizuho Bank | about 1.275% | Same |
| Variable (lowest advertised) | SMBC | about 1.525% | Same |
| 10-year fixed | Mizuho Bank | about 3.60% | 10-year government bond yield |
| 10-year fixed | MUFG Bank | 3.75% | Same |
| Full-term fixed, 31 to 35 years | MUFG Bank | 4.35% | Long-term yields |
| Flat 35, 21 to 35 years, loan ≤ 90% of price | Most common rate across lenders | 3.83% (range 3.83 to 5.84%) | Long-term yields, set monthly |
| Flat 35, 20 years or less, loan ≤ 90% | Most common rate | 3.51% | Same |
Two readings jump out. First, the gap between variable and fixed has never been this wide in recent memory: more than 2.5 points between a megabank's variable rate and its own 10-year fixed rate. Second, the variable rate shown is the rate a borrower pays today, not the rate they will pay in five years. The rest of this guide explains why that distinction now matters more than the headline number.
Rates change every month. Check the lender's own rate page in the month you sign: a mortgage rate in Japan is usually fixed on the day the loan is drawn, not on the day it is approved.
Why rates are rising: the Bank of Japan leaves zero
For almost two decades, a Japanese mortgage was the cheapest borrowing in the developed world, with variable rates between 0.3 and 0.5% at online banks. That era ended in March 2024, when the Bank of Japan abandoned negative rates. It has since raised its policy rate step by step.
| Date | Bank of Japan policy rate | Effect on mortgages |
|---|---|---|
| Until March 2024 | -0.1% (negative rates) | Variable loans at 0.3 to 0.5% at the cheapest lenders |
| March 2024 | 0 to 0.1% | End of negative rates, first upward pressure |
| July 2024 | 0.25% | First rise in base rates for variable loans |
| January 2025 | 0.5% | Variable rates move up again in spring 2025 |
| Late 2025 | 0.75% | Held at this level in January, March and April 2026 |
| June 2026 | 1.0% | Passed into most variable loans from October 2026 |
| September 2026 | 1.25%, the highest since 1995 | Expected in variable loans at the next base-rate reviews |
Fixed rates follow a different signal: the yield on 10-year government bonds. That yield crossed 3% in early September 2026 for the first time since 1996 (the Ministry of Finance's 10-year auction on 1 September 2026 cleared at an average yield of 2.995%). Flat 35, which tracks long-term yields, rose for three months in a row, from 3.46% in September to 3.83% in October, about 1.3 points higher than six months earlier.
The mechanics matter for timing. A Bank of Japan decision does not hit your payment the next morning. Banks first adjust their short-term prime rate, then their posted base rate, usually at fixed review dates in spring and autumn, and an existing borrower's payment only changes at the next scheduled recalculation. The board next meets at the end of October 2026: nobody can tell you its decision, and an article that predicts it is guessing.
For a foreign buyer, the same cycle has a second face: higher Japanese rates can strengthen the yen, which raises the cost of a house paid from dollars or euros. We cover that side in our analysis of the weak yen and Japanese property.
How a Japanese mortgage rate is built
Base rate minus a discount
A Japanese bank publishes a tentō kinri (店頭金利, posted base rate) for each product, then subtracts a yūgū (優遇, preferential discount) that depends on your profile, the property and the bank's campaign. At MUFG in October 2026, the posted variable rate is 3.375% and the best applied rate 1.195%: a discount of more than two points. The discount is usually granted for the life of the loan; the base rate is what moves.
The variable base rate follows the short-term prime rate
The base rate of a variable loan is tied to the tanki purime rēto (tankiプライムレート, short-term prime rate), which banks set according to the Bank of Japan's policy rate. Most banks review the variable rate twice a year, in April and October, and apply the change to repayments a few months later.
The five-year rule and the 125% rule
Most big banks protect variable borrowers with two rules. The go-nen rūru (5年ルール, five-year rule) freezes the monthly payment for five years even if the rate rises. The hyaku-nijūgo pāsento rūru (125%ルール, 125% rule) caps the next payment at 125% of the previous one. These rules soften the shock, they do not cancel it: when rates rise sharply, part of the interest is deferred and the balance falls more slowly. If interest ever exceeds the payment, the gap becomes mibarai risoku (未払利息, unpaid interest), due at the end of the loan. Several online banks do not apply these rules at all and recalculate the payment directly: read the product sheet.
Fixed-period loans switch at the end of the period
A 10-year fixed loan does not stay fixed for 35 years. At the end of the period, it switches to the variable rate or to a new fixed period at the rates of that day, and the preferential discount after the switch is often smaller than the initial one. A fixed period protects you for its length, nothing more.
| Criterion | Variable | 10-year fixed | Full-term fixed / Flat 35 |
|---|---|---|---|
| Starting rate, Oct. 2026 | about 1.2 to 1.5% | about 3.6 to 4% | about 3.8 to 4.4% |
| Payment certainty | Low beyond five years | Total for ten years | Total for the whole loan |
| Who carries the rate risk | You | The bank for ten years, then you | The lender |
| Early repayment | Usually free online | Fee common during the fixed period | Free at Flat 35 above a minimum amount |
| Suits | Short holding, large cash reserve | Plan to sell or repay within ten years | Long holding, tight budget |
Flat 35: the government-backed fixed loan
Flat 35 (Flat 35) is a fixed-rate loan sold by banks and specialist lenders and backed by the Jūtaku Kin'yū Shien Kikō (Jūtaku Kin'yū Shien Kikō, Japan Housing Finance Agency, JHF), a government agency. The rate is fixed from the first to the last payment, for up to 35 years, and the agency publishes the range of rates its partner lenders charge every month.
Flat 35 rates, October 2026
| Term | Loan ≤ 90% of price | Loan > 90% of price |
|---|---|---|
| 21 to 35 years | 3.83% (range 3.83 to 5.84%) | 3.94% (range 3.94 to 5.95%) |
| 20 years or less | 3.51% (range 3.51 to 5.52%) | 3.62% (range 3.62 to 5.63%) |
Source: Japan Housing Finance Agency, rates for loans drawn in October 2026, with group credit life insurance included.
Who qualifies
- Residency. A foreign national must hold permanent residency, eijū kyoka (永住kyoka), or special permanent resident status. A work visa alone is not enough for Flat 35, even though some banks accept it for their own loans.
- The home itself. The property must pass the agency's technical standards, checked by an approved inspector. Many older wooden houses fail them, especially those built before the 1981 seismic code (see our guide to Japan's 1981 earthquake standard).
- Use. Flat 35 finances a home you or your family live in. It is not an investment or holiday-home loan.
- Income. Annual repayments may not exceed 30% of income below ¥4 million a year, or 35% above it.
Flat 35's weakness today is its price: in October 2026 it costs more than double a megabank's best variable rate. Its strength is that a resident who signs today knows the last payment of 2061 to the yen.
What a ¥30 million loan costs at today's rates
Take a resident couple, both salaried in Japan, borrowing ¥30 million (about $192,300) over 35 years for a resale house in a regional city, with equal monthly payments and no bonus repayments.
| Scenario | Rate | Monthly payment | Total interest over the loan |
|---|---|---|---|
| Megabank variable, rate unchanged for 35 years | 1.195% | ¥87,439 (about $560) | ¥6.7 million (about $43,100) |
| Variable, if the rate ends up one point higher on average | 2.195% | ¥102,407 (about $656) | ¥13.0 million (about $83,400) |
| Variable, if the rate ends up two points higher on average | 3.195% | ¥118,745 (about $761) | ¥19.9 million (about $127,400) |
| Flat 35, fixed for 35 years | 3.83% | ¥129,791 (about $832) | ¥24.5 million (about $157,100) |
| MUFG full-term fixed | 4.35% | ¥139,203 (about $892) | ¥28.5 million (about $182,500) |
The variable loan only stays cheaper than Flat 35 as long as its average rate over the whole loan stays below about 3.8%. The question is not "which rate is lower today" but "how high do I think short-term rates will go, and can I absorb it if I am wrong".
The five-year rule in practice
On the same variable loan, suppose the rate rises by two points to 3.195% in year six. After five years, about ¥26.4 million is still owed. Recalculated over the remaining 30 years, the payment would be ¥114,284. The 125% rule caps it at ¥109,299 (about $700): about ¥5,000 a month is not repaid on time and the balance falls more slowly, leaving a residual to settle at the end of the loan. The rule bought time; it did not make the rise free.
The costs of setting up the loan
| Cost | Typical amount | Note |
|---|---|---|
| Administration fee, jimu tesūryō (jimu tesūryō) | Often 2.2% of the loan at online banks | Or a fixed fee plus a guarantee fee |
| Guarantee fee, hoshōryō (hoshō-ryō) | Around 2% of the loan if paid upfront at the big banks | Can be added to the rate instead |
| Registration tax on the teitōken (抵当権, mortgage lien) | 0.4% of the loan, reduced to 0.1% for qualifying homes | Plus the shihō shoshi (judicial scrivener) fee |
| Stamp duty on the loan contract | ¥20,000 for a loan of ¥10 to 50 million | Fixed by bracket |
| Group credit life insurance, danshin (団信) | Usually included in the rate | Pays off the loan on death or severe disability |
These are financing costs, separate from the purchase costs themselves, which stay at most 6% of the price (detail in our guide to buying costs in Japan). Lenders also require fire insurance on the building for the length of the loan.
The "100-year mortgage" and 50-year loans
"Japan 100-year mortgage" is searched hundreds of times a month. No major Japanese bank sells a 100-year loan today. The phrase circulates online, often attached to stories of multi-generation loans from the bubble years (our article on Japan's property bubble tells what that period really was). What does exist is more modest, and better documented:
- 50-year terms. Regional banks pioneered them; Sumishin SBI Net Bank launched one in August 2023 and PayPay Bank extended its maximum term from 35 to 50 years in July 2025. Final repayment must usually take place before age 80, so in practice only borrowers in their twenties or early thirties can use the full 50 years, and the rate is often slightly higher than at 35 years.
- Parent-child relay repayment, oyako rirē henzai (親子リレー返済): a child takes over the loan from the parent, which lets an older borrower take a longer term. Flat 35 offers it.
On ¥30 million, stretching the term from 35 to 50 years at about 1.3% lowers the payment from ¥87,439 to about ¥67,948, but total interest rises from ¥6.7 million to about ¥10.8 million, and the borrower is still repaying in retirement. A long term is a tool for affordability, not a saving.
Can a foreigner borrow at these rates?
The rates above are only available to borrowers the banks will accept, and Japanese banks are strict. In practice:
| Profile | Japanese mortgage | Realistic route |
|---|---|---|
| Permanent resident, salaried in Japan | Yes, banks and Flat 35 | Compare variable and fixed on the full cost |
| Work visa, salaried in Japan for several years | Sometimes, at a few banks, often with a larger down payment | Ask several banks; Flat 35 is closed |
| Self-employed resident, recent arrival | Rarely | Cash, or wait for two to three years of Japanese tax returns |
| Non-resident, living abroad | No | Cash, or financing raised in your home country |
We cover each case, the banks and the documents in our guide to getting a mortgage in Japan as a foreigner, and the options for buyers financing from Europe in financing a Japanese purchase from abroad. Buying a property does not give any visa or right of residence, and it does not open the door to a Japanese loan either.
For most of our readers, then, Japanese rates matter indirectly. A cash buyer is not exposed to them, but they shape the market: higher mortgage costs reduce what local buyers can pay, especially for new condominiums in big cities, while rural houses already sell mostly to cash buyers. Many of the houses in our listings of houses for sale in Japan cost less than a car loan, and our selection of Japanese houses under $100,000 shows what a cash budget buys today.
The mortgage tax credit for residents
A resident who borrows to buy the home they live in can claim the jūtaku rōn kōjo (jūtaku loankōjo, mortgage tax credit): 0.7% of the year-end loan balance is deducted from income tax, for up to 13 years on a new home and 10 years on a resale home, within caps that depend on the building's energy performance. With variable rates at 1.2%, the credit still offsets a large share of the interest; with fixed rates near 4%, much less. The rules are set by the National Tax Agency and revised by each tax reform: check them for the year you move in.
Mistakes to avoid and expert advice
Frequent mistakes
- Comparing advertised rates instead of total cost. A 0.2-point cheaper rate with a 2.2% administration fee can cost more than a slightly higher rate with no fee. Compare the effective cost over the period you will really keep the loan.
- Reading 2024 rates. Many English-language pages still quote variable rates of 0.3 to 0.5%. Those rates no longer exist: in October 2026 the floor at the megabanks is around 1.2%.
- Taking the five-year rule for insurance. It delays the rise, it does not cancel it, and the balance owed at the end can surprise you.
- Forgetting the end of a fixed period. A 10-year fixed loan becomes a variable or new fixed loan at the rates of 2036, with a discount that may be smaller.
- Assuming any house can be financed. An old wooden house, a property on leased land, or a building that fails the 1981 seismic code often cannot be mortgaged at all.
Expert advice
- Stress-test at +2 points. If the variable payment at 3.2% would break your budget, take a fixed rate or borrow less.
- Keep a cash reserve equal to the extra payments of a two-point rise over several years: early partial repayment is free at most online banks.
- Ask for the discount in writing and check that it applies for the whole loan, not only the first years.
- Simulate before you visit. Our property and rental yield simulators let you test a price, a rate and a term, and the step-by-step guide to buying a house in Japan shows where the loan fits in the calendar.
Conclusion: cheap money is over, not borrowing
Japan's mortgage rates are still low by American or European standards for a variable loan, but the direction has changed: the Bank of Japan is at 1.25%, the 10-year yield has crossed 3%, and Flat 35 stands at 3.83%. For a resident, the choice between variable and fixed is now a real decision about risk, to be made with a stress test, not on the headline rate. For a non-resident, nothing changes: the purchase is made in cash, and higher rates mostly mean less local competition on the houses that interest you. If you want help structuring a purchase, from the search to the signature, our Signature support package covers the whole process, and our overview of real estate in Japan is the place to start comparing regions.
Frequently asked questions
What is the current mortgage rate in Japan?
In October 2026, the best advertised variable rates at the megabanks start at about 1.2%, 10-year fixed rates are around 3.6 to 4%, and the most common Flat 35 rate is 3.83% for a 21 to 35-year loan. Rates are published monthly and the one that applies is the rate of the month the loan is drawn.
Why are mortgage rates rising in Japan?
The Bank of Japan ended negative rates in March 2024 and has raised its policy rate several times since, to 1.25% in September 2026. Variable rates follow that policy rate, while fixed rates follow 10-year government bond yields, which crossed 3% in September 2026.
Is a variable or fixed mortgage better in Japan?
A variable loan is cheaper today, but you carry the risk of future increases; a fixed loan costs more from the first month but freezes the payment. On ¥30 million over 35 years, the variable loan stays cheaper than Flat 35 only while its average rate stays below about 3.8%. Stress-test your budget at two points above today's variable rate before choosing.
Can a foreigner get Flat 35?
Only with permanent residency or special permanent resident status, and only for a home they or their family will live in. Holders of a work visa may find a bank loan at some lenders, but not Flat 35. A non-resident cannot get a Japanese mortgage and buys in cash.
Does Japan really have 100-year mortgages?
No major Japanese bank offers a 100-year mortgage today. Some banks offer terms of up to 50 years, generally with final repayment before age 80, and parent-child relay loans let a child take over a parent's loan.
What is the five-year rule on Japanese variable mortgages?
At most big banks, the monthly payment of a variable loan stays the same for five years even if the rate changes, and the next payment cannot exceed 125% of the previous one. When rates rise sharply, part of the interest is deferred and the remaining balance falls more slowly. Some online banks do not apply these rules.
How much is the monthly payment on a ¥30 million mortgage in Japan?
Over 35 years with equal payments, about ¥87,400 at a 1.195% variable rate and about ¥129,800 at the 3.83% Flat 35 rate of October 2026. The difference over the full loan is about ¥17.8 million of interest if the variable rate never moves.
Official sources
Put numbers on it
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