Financing

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For investment properties there is currently no reasonable financing except in some cases by the Bank of China. For primary residence it is only attractive for Japanese citizens or permanent residents.

Banks

Mizuho, MUFG, Resona, Sumitomi

If you have permanent residency or are a Japanese citizen these Japanese banks will lend over 90% for a primary residency at very favorable rates. Also it might be possible to get an 80% loan for a second home for very competitive interest rates. This may be an investment property. To apply for a loan with any of these major banks just walk into your branch. Some companies have referral programs, so inquire with your HR department before applying.


Shinsei Bank

In some cases Shinsei bank might issue a mortgage to a non-permanent resident if they are married to a Japanese. For primary residence their interest rates and Loan-To-Value is competitive with the major Japanese banks


Orix

Orix will lend to residents of Hong Kong. Loan-to-value maximum 50%, interest rate Libor + 2.9%, only newer buildings and larger deals.


Citibank

Citibank will lend for about 2% interest rate for a primary residence with a maximum Loan-to-Value of 70%. This interest rate is almost twice what Japanese banks charge, but in some cases they can accept non-permanent residents.


Suruga Bank

Suruga Bank will lend on investment properties to permanent residents. The interest rate in that case is 4.6% floating. For an appointment contact Mr Itou at the MidTown branch. Phone number: 03 5411 2361 Email: iin2155@surugabank.co.jp.

We heard some reports that their Shibuya branch offers over 100% mortgages on old apartment buildings outside Tokyo through an intermediary real estate firm and their associated financial advisers. However given the limited price information for such buildings and areas this might be done through inflated appraisals, duplicate contracts and false deposits. Given the management issues in areas where these buildings are located and the extremely limited price information available, not to mention the dubious origin of the deposit, extreme caution is advised before taking on such a mortgage.


National Australia Bank

NAB lends to non-permanent residents. The minimum loan amount is 35 million yen per property. For primary residence their LTV is up to 80%, much lower than the 90%+ offered by Japanese banks. Their interest rate of Libor + 2% is about double what Japanese banks charge. For investment properties they offer maximum 70%, but due to very low valuations in effect this comes out to about 60%. Given the minimum loan size this means a property needs to be at least 60 million yen. High yielding investment properties in general are much cheaper than that. Also the maximum loan length is shortened for older properties. The best investment apartments are around 30 years old. For these properties NAB will offer a loan for no more than 5 years. The yield on buying smaller and older investment properties unleveraged is higher than buying a conforming property leveraged, making the current NAB loan product unsuitable for investment properties. It is the only mortgage product available for people without permanent residence, so for such people it is worth considering when buying a primary residence..


Bank of Taiwan

BoT lends primarily to Taiwanese citizens. Their interest rate is around 2.8 to 3.5% with a LTV of up to 70% for primary residence. For investment properties the maximum loan length is 10 years, although it will likely be shorter for older properties. As a result their loan product does not seem suitable.


Bank of China

BOC only lends to Chinese or Japanese speakers with the following conditions

  • The Loan-to-Value is maximum 50%
  • The minimum loan size is 20 million yen.
  • Building age has to be less than 40 years.
  • Loan duration is maximum 15 years.
  • Need to submit 3 years proof of income. Minimum annual income has to be more than 3 million yen.

Contact Mr.Hang at +81 90-6750-0949 for details (Chinese/Japanese only)


Commonwealth Bank Of Australian

CBA stopped lending in October 2010


Lloyds TSB International Mortgages

Lloyds lends on properties in many countries, but not on properties located in Japan. They will not even lend to residents of Japan on properties outside Japan either. Look here for the countries and corresponding interest rates they do service.


HSBC

HSBC never really issued mortgages as all applications we heard of were declined. Now they have made this policy formal by not accepting any new applications anymore. This will save everybody time and effort. Interest Rates. On February 22 2012 HSBC announced that they will close their retail operation in Japan completely.

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