Not few expats think about their life design on the premise that they live in Japan as long as possible. Come to Japan as a student abroad, go into Japanese university or college as a regular student, start working for a Japanese company after graduation, get married to Japanese, give birth of children, and settle in one place to live with family.
If you walk through such a life in Japan, you may think about taking up residence in Japan. For those who choose Japan as a home base country, I want to talk about if non-Japanese residents can take out home loans from Japanese banks and how to apply for home loans in Japan.
Contents
- 1 Make sure your visa status is eligible for home loan application
- 2 How to take up a home loan in Japan without permanent visa status
- 3 What kind of matter is investigated through the loan screening
- 4 Japanese financial institutions that make a home loan for non-Japanese residents without permanent resident status
- 5 Foreign financial institutions that make a home loan for non-Japanese residents without permanent resident status
Make sure your visa status is eligible for home loan application
Principally, non-Japanese residents who want to take up a home loan in Japan need to have the resident status of “permanent resident”. There are some reasons for this condition. Each resident status has the duration of stay, which is needed to renew on a regular basis as necessary. Some of the non-Japanese residents return back to their home countries without renewing their status.
A home loan basically assumes long term refund so that it is difficult for non-Japanese residents whose duration of stay is short or unclear to take up a loan in Japan.
Your occupation and working situation also influence on the loan screening. If you stood in the position of a person who approves the loan screening, which company you would have a good impression to make a loan, Japanese company or foreign affiliated company? In terms of the in-house transfer, a person who works for a foreign affiliated company may be sent to the country where the headquarter is located and have the possibility of never returning back to Japan. For that reason, banks providing home loan plans tend to hesitate to make a loan to such a person.
Moreover, non-Japanese residents need to find a guarantor to take up a home loan like a mortgage just in case you are on the verge of insolvency. (If you become insolvency, a guarantor will pay your home loan instead.) If a home loan applicants have no one to rely on to ask for a guarantor, those applicants generally request guarantor companies to become their guarantors.
However, non-Japanese residents without permanent status can’t make a contract with a guarantor company. In this case, these people need to find Japanese people to ask for a guarantor. However, it is very difficult to pass through the loan screening if you don’t have your relatives who have Japanese nationality.
How to take up a home loan in Japan without permanent visa status
As per the above, you need to principally have permanent resident status if you take up a home loan in Japan. But non-Japanese residents without permanent resident status also can take up a loan if satisfying conditions required by the banks. The followings are the example of a part of the conditions you may require.
- You can prepare 20% of offered initial deposit.
- You have lived in Japan for over 5 years.
- Your spouse is Japanese.
In addition, even if you don’t satisfy the conditions of a home loan designated by a Japanese financial institution you apply to, if there is a branch office of financial institution of your country in Japan, asking it for an advice is one of your solution.
However, you should keep in mind that home loan interest of foreign banks in Japan is way more expensive than Japanese ones’. Moreover, you may also have the disadvantage that you may not be able to choose interest type from fixed rate or floating rate.
What kind of matter is investigated through the loan screening
Simply, the main point of loan screening is if an applicant have sufficient solvency enough to repay the home loan.
Concretely,
- How much amount of repayment occupied in annual income you have
- if you have multiple loans made by other financial institutions
- The length of your service in the company you work for
- If you are a self-employer, copies of financial statements and tax return certificate need to be submitted
These are the examples. There is a case you may be screened in a rigorous way. In comparison between your present situation and the above conditions, you need at least not to remain concerns about these factors before screening.
Depending on the financial institution, Japanese communicating ability is one of conditions to make a home loan.
Japanese financial institutions that make a home loan for non-Japanese residents without permanent resident status
Tokyo star bank
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Interest rate
| 6 months | 2.3% | 1.2% | 3 years | 2.8% | 1.05% |
| 5 years | 2.85% | 1.10% | |
| 10 years | 2.7% | 1.4% |
Shinsei bank
| An applicant shall have a Japanese spouse or a non-Japanese spouse with permanent resident status and let a spouse become a guarantor. | |
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Kyodo residence loan Ltd
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Foreign financial institutions that make a home loan for non-Japanese residents without permanent resident status
Bank of communications Limited (Shanghai), Tokyo branch
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Bank of China
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SBJ
| Applicant shall be older than or equal to 20 years old and longer than or equal to 65 years old when taking up a loan, and younger than 80 years old as of complete repayment | |
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| From 3 years to 35 years | |
| From 1 million yen to 100 million yen | |
| 10% | |
| From 2.857% to 3.357% |