Japan housing finance and mortgage trends

Developments in the Japanese housing sector involve both new financial products and ongoing household economic trends. The Japan Housing Finance Agency is expanding its ‘Flat 35’ mortgage program, introducing a ‘Flat Sumairu Point’ service in October 2026 and allowing the inclusion of simple home renovation costs in used housing loans starting in September 2026. Additionally, Rakuten Bank has introduced ‘Flat 50,’ a mortgage product featuring fixed interest rates for repayment periods of up to 50 years.

Concurrently, financial data indicates significant mortgage burdens for Japanese households in their 50s, with nearly half of multi-person households owing more than 10 million yen. In the rental market, Ministry of Land, Infrastructure, Transport and Tourism guidelines clarify that tenants are responsible for damage from negligence or intentional acts, but are not liable for natural wear and tear or aging.

As the housing market experiences a boom, Japan’s Financial Services Agency (FSA) is increasing scrutiny of ultra-long mortgage lending, specifically 50-year home loans. While lenders like SBI Shinsei Bank and Rakuten Bank offer these terms to accommodate younger borrowers with modest incomes, the FSA has expressed concern regarding repayment risks. Key concerns include the impact of rising interest rates or declining incomes on floating-rate mortgages, as well as the risk of negative equity due to slower principal repayment. The agency intends to intensify monitoring and may engage directly with banks to ensure households do not take on debt beyond their repayment capacity.