Japan mortgage holders face rising anxiety over interest rate hikes

Rising interest rates in Japan are causing significant financial concern among homeowners. Following the Bank of Japan's decision to raise policy rates to 1.25 percent, mortgage rates have seen a dramatic shift. Fixed-rate Flat 35 rates have reached a record high of 3.83 percent, while variable rates at major banks have entered the 1 percent range.

A survey by Chuo Property of 240 mortgage holders aged 20 to 40 revealed that 87.1 percent feel anxious about rising rates. Notably, 80 percent of respondents indicated that a monthly increase of less than 10,000 yen would be difficult to manage, with 22.5 percent stating that even a 1-yen increase would be a struggle.

Experts suggest that while many are turning to household saving and early repayments to cope, these measures may carry risks. Professor Takeshi So of Reitaku University notes that the previous logic of borrowing as much as possible due to negative real interest rates has changed. Chuo Property representative Masao Matsubara warns that focusing solely on immediate savings or early repayments could lead to liquidity shortages for other life events, such as education costs, and advises homeowners to assess their property's asset value and overall life plans.