Bank of Japan interest rate hikes increase mortgage burdens

The Bank of Japan’s shift away from negative interest rate policies and subsequent interest rate hikes are creating significant financial pressure on households, particularly those with variable-rate mortgages. Since the termination of the negative interest rate policy in March 2024, interest rates have been rising incrementally.

Approximately 80% of mortgage holders utilize variable interest rates, making them highly vulnerable to these policy changes. As banks raise lending rates to increase profitability and manage rising procurement costs, borrowers are facing sharply increasing monthly payments. This trend poses a growing risk for long-term repayment stability and places a heavy burden on younger generations already struggling with high construction costs.