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House Loan In Japan For Foreigners - What You Need To Know

In Japan, all foreigners have the opportunity to purchase land or property, and the majority of foreign residents can apply for housing loans. While it's not a strict requirement, having permanent residency is often preferable when applying for a house loan from a Japanese financial institution. However, recognizing the diverse needs of non-permanent residents, some financial institutions offer specialized house loan products tailored for individuals without permanent residency.

Please see the steps for purchasing property here

Can foreigners apply for a house loan in Japan?

Certainly! Yes, foreigners are eligible for house loans in Japan, but meeting specific criteria is necessary to apply for one. Here are the typical requirements expected of Japanese financial institutions:

1. The applicant should be between the ages of 20 and 65, with an age limit of no older than 80 when the loan is fully repaid.

2. The applicant must have a stable income for at least one year as a full-time employee or at least two years if self-employed or working on a contract basis. (Note: The working period and income amount may vary depending on the chosen financial institution.)

3. The applicant should be eligible for group credit life insurance.

While the above criteria are essential, the most critical factor for foreign nationals to secure a home loan is whether they have permanent residency (永住権). Different house loan options are available based on the applicant's permanent residency status, and further details are provided in the following section.

4-1. Applying for a house loan with permanent residency:

If you hold permanent resident status, you are eligible to apply for a house loan like with Japanese citizens. Key requirements for obtaining the loan typically include:

  • Annual household income.

  • Length of employment and employment status, particularly for individuals working in companies.

  • Existence and current repayment status of other loans.

  • In some cases, proficiency in reading and speaking Japanese may be required by certain banks.

4-2. Applying for a house loan without permanent residency:

There are certain circumstances where non-permanent residents may still be eligible to apply for a house loan.

Case 1 - Ask your Japanese spouse to be your guarantor:

If the applicant's spouse is a Japanese citizen or a permanent resident of Japan, they can act as a joint guarantor, allowing the applicant to apply for a house loan with the bank.

Case 2 - Using the local branch of a bank from your home country:

Securing a house loan may be possible by utilizing a bank from your home country. If a bank from your home country has a branch in Japan, you may qualify for a house loan.

Case 3 - Using a bank from your home country:

Some international banks permit individuals to take out a house loan in their own currency to purchase property in foreign countries, including Japan.

Case 4 - Apply for specific house loans for foreigners with additional criteria from a Japanese financial institution: Certain Japanese financial institutions offer house loans for foreigners without permanent residency, but additional criteria apply:

  • Years of residence in Japan: Have resided in Japan for more than 5 years? Which can be viewed favorably by financial institutions as an indication of stability.

  • Number of years of work: Applicants are typically required to have worked for the same company in Japan for a duration ranging from 1 to 3 years. Longer employment is generally seen as a positive sign for a stable income.

  • Amount of down payment: Financial institutions usually require a down payment of at least 20% of the property price, or more, depending on your workplace and annual income.

  • Position of employment: Being a regular employee is often more advantageous than being a business owner when applying for a house loan.

  • Japanese language ability: Your ability to communicate effectively in Japanese and understand the contents of the contract is crucial.

These criteria collectively contribute to the evaluation process for house loan applications in Japan, and meeting these requirements can enhance the likelihood of approval.


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