THE ASAHI SHIMBUN
December 31, 2022 at 15:36 JST
A Mizuho Bank branch advertises a consultation corner for potential housing loan applicants. (Asahi Shimbun file photo)
Five leading Japanese banks announced sharp increases in the interest rate for fixed-rate mortgages to be offered to new home buyers from January.
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 point. But the increase in January will be 0.18 percentage point at MUFG Bank and 0.26 percentage point 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.
That interest rate is unaffected because the BOJ did not change its policy on short-term interest rates that are linked to variable-rate mortgage rates.
From January, the annual interest rate for fixed-rate mortgages will reach levels not seen since October 2013 at MUFG Bank, Sumitomo Mitsui Banking and Resona Bank. The annual interest rate at Mizuho Bank will be 3.5 percent, a level not seen since November 2011, while the 3.74 percent rate at Sumitomo Mitsui Trust Bank will hit a level not seen since July 2013.
Annual interest rates for the most preferential interest rate for 10-year fixed-rate mortgage products will also rise from January to 1.05 percent at MUFG Bank, 1.14 percent at Sumitomo Mitsui Banking and 1.4 percent at Mizuho Bank.
(This article was written by Takehiro Tomoda and Ryoko Takahashi.)
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