Getting a Home Loan in Japan as a Non-Japanese Buyer

Foreigners can own land and buildings freely, with a simple notification in some cases. Mortgages are harder. Major banks such as MUFG, Mizuho and SMBC typically require permanent residency or a long-term visa and Japanese income. SBI Shinsei and Prestia have historically been open to non-permanent residents with strong profiles.

Non-residents abroad are rarely accepted, so many purchase in cash or through a loan secured against assets elsewhere.

A Japanese guarantor company, hoshō-gaisha, usually stands behind the loan.

Variable-rate loans have been priced below 1% for years, though the Bank of Japan has been normalising policy and rates are rising. Fixed-rate loans cost more. Residents can borrow close to 100% of the price with costs, whereas foreigners may be limited to 80% or less.

Terms can run to 35 years, but must end before about age 80. Use the mortgage calculator.

Banks request Japanese-language forms.

A real estate agent (takken) explains important matters.

1. Choose a bank and get pre-screening.
2. Receive the explanation of important matters (jūyō jikō setsumei).
3. Sign the sales contract and pay the deposit.
4. Complete the loan contract.
5. Settle and register ownership via a judicial scrivener.
6. Pay acquisition tax.

Many foreigners use cash for low-priced akiya or buy in resort areas. Refer to apartments, houses and land.

Japan has several modest taxes.

Buildings after 1981 meet stricter seismic rules. Check the inspection.

Vacant rural homes can be very cheap but need repair.

Cross-border payments over a limit must be reported.

Banks in Japan require a guarantee company that pays the bank if you default. The fee is either added to the interest rate or paid up front. You also need group credit life insurance, which is usually included in the rate. Foreigners who cannot meet these requirements are often turned away even if the income is high, so ask in the first meeting whether your visa category qualifies. Permanent residents are treated nearly the same as Japanese applicants, while holders of work visas may need a longer record of employment.

Tokyo, Osaka, Kyoto and Fukuoka have the most active resale markets, with condominiums (mansion) dominating the cities. Ski resorts such as Niseko and Hakuba attract overseas investors, and many deals there are in cash. Rural homes are often very cheap, but buildings may be in poor condition and the land may be hard to resell. A building inspection (hōmu inspection) is worth the cost.

Owners pay the annual fixed asset and city planning taxes, plus condominium management and repair-reserve fees every month. If you live abroad, you must appoint a tax agent in Japan to file returns and handle bills. Rental income is taxable, and sale gains are taxed at a lower rate if you hold the property for more than five years.

Most documents are in Japanese, and agents who speak English are concentrated in Tokyo and resort areas. Hire an interpreter or a bilingual judicial scrivener (shihō-shoshi) for the registration step. The seal registration (inkan tōroku) is required for contracts, so register your seal at the local ward office after arrival. Opening a Japanese bank account can be difficult for newcomers, so ask your agent which bank accepts your visa category before you plan your payments.

Some buyers use a loan from their home bank secured on assets there, then transfer yen via a registered foreign-exchange channel. Exchange rates matter: a falling yen has made Japanese property cheaper for dollar and euro buyers in recent years but can reverse. If you earn in another currency, think carefully about whether to hold yen debt.

Fire insurance is compulsory for mortgaged homes, and earthquake cover is optional but wise. Check flood and landslide hazard maps published by the municipality, especially for riverside and hillside plots, and ask whether the area has seen recent damage.

See our Japan consultation guide and market analysis. Entry points: commercial.