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Survey says variable rate loans account for 77 percent of Japan housing loans

Writer's picture: Adam GermanAdam German

On January 21st, the Japan Housing Finance Agency released the results of their October 2024 housing loan survey, targeting 1,419 respondents aged 20 to 70 who borrowed housing loans between April and September 2024. 

Japanese couple going over their housing loan options.

Key Findings 

Loan Interest Rates:

Loans with interest rates of 0.5% or lower were the most common, chosen by 37.1% of respondents, up from 34.3% in April 2024. 


Repayment Terms:

Nearly half (48.6%) of respondents reported repayment periods of over 30 years but within 35 years, a slight decrease from 50.8% in the previous survey. Loans with terms exceeding 35 years increased in proportion. 


Loan-to-Value (LTV) Ratios

LTV ratios of over 90% but not exceeding 100% remained steady at 25.1%. 

 

Debt-to-Income Ratios (DTI): 

The most common DTI range was over 15% but not exceeding 20%, reported by 24.9% of respondents, down from 26.6%.

 

Interest Rate Types: 

Variable rates continued to dominate, chosen by 77.4% of borrowers, up 0.5 percentage points from April 2024. Fixed-term rates fell to 13.5%, while full-term fixed rates rose slightly to 9.0%. 

 

Expectations for Interest Rates: 

Looking ahead, 62.9% of respondents expect interest rates to rise within the next year, up from 50.5% in April 2024.


Meanwhile, 26.6% expect rates to remain stable, and 2.5% anticipate a decline


Impact of Rising Costs: 

Amid inflation and higher housing prices, 61.2% of respondents reported changes to their housing plans: 

  • Increased budgets or loan amounts (26.1%) were the most common adjustment. 

  • Other changes included revising property size or age (14.7%) and reevaluating location (14.5%). 

 

Further Reading: 

Japan Housing Finance Agency October 2024 housing loan survey (Japanese only; offers more granular data than outlined above) 


Source: 

R.E. Port News (Japanese only) 

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