Tokyo Bank Introduces Controversial 50 Year Loan

Sep 05, 2024 | News On Japan

TOKYO - Buying a home is often considered the biggest purchase of one’s life. A mortgage is essential, with the standard repayment period being 35 years. However, Keiyo Bank has caused a stir by becoming the first regional bank in the Tokyo metropolitan area to introduce a 50-year mortgage plan.

We asked people on the street for their honest opinions about continuing mortgage payments for 50 years.

A person in their 20s commented, "If you start working right after high school and get married around 20, the long working period makes it easier for people in that situation to take the plunge."

Another person in their 20s said, "The reduced monthly payments are beneficial for younger generations."

The primary advantage of a 50-year mortgage is the reduction in monthly payments. For example, if you purchase a new Y100 million apartment in Tokyo, the monthly payment with a 35-year mortgage would be approximately Y270,000. With a 50-year mortgage, this amount drops to about Y199,000, saving around Y70,000 per month.

There’s a reason why the example used involves a Y100 million price tag. The average price of a new apartment in Tokyo has exceeded Y100 million due to rising property values.

A person in their 30s living in a rental said, "Prices are high in certain areas, especially in Tokyo."

Another person in their 30s added, "A house is different from buying a car. Given the frequent earthquakes lately, I would want to be cautious before making such a big decision."

We asked a representative from Keiyo Bank’s loan department about the bank’s intentions behind introducing the 50-year mortgage plan.

The representative explained, "The 50-year repayment period allows for lower monthly payments, making it easier for younger people to purchase properties. Our target audience includes those in their 20s and early 30s, as the loan must be fully repaid before the borrower turns 80."

The conditions for obtaining a 50-year mortgage include the borrower being under 80 years old at the time of full repayment and the purchase of a new home within Chiba Prefecture or its surrounding areas.

However, the prospect of taking on a 50-year mortgage still raises concerns, so we asked people on the street for their thoughts.

A woman in her 20s remarked, "It’s quite long. I’d rather pay off the loan quickly, so the reduced monthly payment doesn’t make a big difference."

A man in his 20s commented, "While a longer loan period provides security in old age, the additional payments over time are a concern."

We also asked an older generation what they thought about the 50-year mortgage plan if they were in their 20s.

A person in their 40s currently repaying a 35-year mortgage said, "If you buy a house in your 20s, it’ll be quite old after 50 years, and you might want to move or buy a new one. Given that risk, I’d prefer a loan of around 30-odd years."

Another person in their 40s living in a rental commented, "50 years… In this unpredictable era, I can’t even foresee what tomorrow will bring, let alone know if I’ll still be alive in 50 years. It’s too far into the future to make such plans."

We then asked a financial planner for their insights. Fuji TV’s deputy editor and commentator Yuichi Tomita, who holds a financial planning qualification, explained the benefits of the 50-year mortgage.

Tomita said, "Reducing the monthly payments lowers the burden on income, making it easier for younger generations with lower incomes to purchase homes. It also opens up more options for properties and allows the saved money to be used for other life events, such as childbirth and education."

However, extending the loan period by 15 years means that if you borrow Y100 million, the total repayment amount will increase to Y119 million. This results in an additional Y6 million in payments compared to a 35-year mortgage.

Finally, we spoke to a person in their 30s who took out a 50-year mortgage to purchase a house.

The homeowner explained, "Out of all the different types of mortgages, the home loan offers the lowest interest rate. By choosing this loan, we can keep more cash on hand. Although the total borrowed and repaid amounts are higher, the amount of money we retain is also greater. We deliberately chose the 50-year loan because we wanted to borrow for a longer period."

Given that repayments will continue even after retirement, it is crucial to plan your finances for the future in detail.

Source: FNN

Toyota to Launch Self-Driving Taxis in 2027

Toyota Motor will begin operating fully autonomous taxis in 2027 through a partnership with U.S. self-driving technology company Waymo, marking a major step in the Japanese automaker's efforts to expand driverless transportation services.

Mount Fuji Puts on First Snowcap

Mount Fuji has received its first snowcap of the season, the Japan Meteorological Agency announced on October 30, after temperatures at the summit plunged to minus 9.4 degrees Celsius, marking the arrival of winter conditions on Japan's highest mountain.

Chinese Female Spy Suspected of Targeting Nvidia Chief

U.S. intelligence agencies suspect that a Chinese female intelligence operative developed a close relationship with Nvidia CEO Jensen Huang in an attempt to obtain confidential corporate and U.S. government information, according to a report published by The New York Times on October 29th.

Japan Blocks Websites Leaking GMO Personal Data

The Japanese government has asked major telecommunications operators to forcibly block access to websites believed to contain personal information stolen in a cyberattack on GMO, it emerged on October 29th, as authorities moved to prevent further exposure of sensitive data online.

Typhoon No. 31 Heads Toward Japan's Remote Islands

Typhoon No. 31 was located near Minamitorishima Island in the Pacific Ocean, as of 3 a.m. on October 30, and was expected to approach the Ogasawara Islands south of Tokyo over the October 31-November 1 weekend while maintaining very strong intensity, bringing a growing risk of dangerously high waves, powerful swells and extremely rough seas.

MEDIA CHANNELS

MORE Business NEWS

Cyberattacks Hit Muji, Matsuya, ANA and Foreign Ministry

A series of cyberattacks has exposed millions of personal records belonging to customers of major Japanese companies, including Muji, Matsuya and All Nippon Airways, as well as individuals connected to the Foreign Ministry, while cybersecurity experts investigating a separate attack involving GMO say a serious mistake by the hackers may provide crucial clues to their identities.

World's Largest Nitori Store Opens in Osaka

Japan's furniture and home goods retailer Nitori opened what it describes as its largest store in the world on October 30th in Osaka's Chayamachi district, bringing a major new retail destination to an area east of Hankyu Osaka-Umeda Station known for its youth culture, fashion boutiques, and specialty shops.

Japan Stocks Plunge 1,369 Points as AI Selloff Hits Tokyo

Japan's Nikkei 225 Stock Average plunged 1,369.36 points, or 2.12%, to close at 63,290.11 at 3:30 p.m. on Friday, October 30, ending a three-day winning streak as a sharp selloff in semiconductor and artificial intelligence-related shares swept through the Tokyo market, while the Bank of Japan's decision to leave interest rates unchanged failed to restore investor confidence.

BOJ Says Underlying Inflation Has Effectively Reached 2% Target for First Time

The Bank of Japan announced on October 30th that underlying inflation has effectively reached its 2% target for the first time since the goal was introduced in 2013, marking a major milestone in the country's efforts to achieve sustained price growth, while keeping its benchmark interest rate unchanged at 1.25% as policymakers assess the impact of last month's rate increase.

Halloween Costume Prices Double in Five Years

Halloween celebrations across Japan are becoming increasingly expensive as October 31 approaches, with costume prices nearly doubling over the past five years and the average spending budget rising to 8,148 yen, prompting more people to find creative ways to enjoy the annual event without stretching their finances.

Hands Shibuya to Close After 48 Years

Hands Shibuya, one of Tokyo's best-known variety stores, will close on November 15 after 48 years in business, bringing an end to a shopping destination famous for its enormous selection of innovative household goods, stationery and unusual gadgets, with around 100,000 products still filling its shelves in the final weeks before closure.

Japan Stocks Rise for Third Day as Nikkei Reclaims 64,000

Tokyo stocks extended their recovery on Thursday, October 29, with the Nikkei 225 closing at 64,659.47 points at 3:30 p.m., up 705.28 points, or 1.10%, from the previous session, as renewed buying of semiconductor and artificial intelligence-related shares helped the benchmark record its third consecutive daily gain ahead of the Bank of Japan's monetary policy decision.

GMO Offers 150 Million Yen Reward to Identify Cyberattackers

GMO has announced a reward totaling approximately 150 million yen for information leading to the identification of hackers responsible for a cyberattack on its systems, while also pledging compensation to customers whose personal information has been exposed, as Japan faces a growing wave of cyberattacks targeting major companies.

< 2 3 4 5 >