Housing Loan for foreigners buying properties in Japan
In the past few years, Japanese banks have been not keen on offering a loan to foreigners and many of them are requiring foreigners to hold a permanent resident (PR) visa status. However, there are a few financial institutes that offer a loan for foreigners without PR.
Foreigners with PR
Financial institutes offering a loan to foreigners with PR
- Banks called as commercial banks:
Mitsubisi Tokyo UFJ bank, etc
(generally called 'Toshi Ginko')
- Trust banks
(generally called 'Shintaku Ginko')
- Regional banks
(generally called 'Chi-gin')
- Mortgage firms (Life Housing Loan, etc)
Foreigners without PR
Plaza Homes introduces the available financial institutes to our customers based on their needs and conditions.
About a Housing Loan
General Prerequisites for a housing loan
Japanese way to express:
- To reside in Japan
- To be capable of providing a withholding tax certificate*1 and a taxation certificate*2
- The property to purchase is for an own residence
- To be capable of communicating at the least level and writing own name and address in Japanese.
*1: Withholding Tax Certificate = 'Gensen-cho-shu-hyo'
*2: Taxaction Certificate = 'Kazei-sho-mei-sho'
TYPICAL CASES FOR FOREIGNERS TO OBTAIN A LOAN
- Who has stable earnings in Japan
- Who can provide decent amount of own fund* to purchase a residential property
- The maximum life of a loan is between 25 and 35 years
*Normally, it is required to cover 10 to 30% of the price of the property from own funding in order to purchase a residential property.
(In general, financial institutes do not fund 100% of the property; the buyer is expected to cover the remaining sum from own funding. Furthermore, you need to prepare for miscellaneous expenses, approx. 10% of the cost of the property, to purchase a property; which you also need to provide from own funding.)
This is just a general example. Please be advised that the situation may vary depending on your condition and examination outcomes of financial institutes.
- Sales Price: ¥100,000,000
- Deposit: 10% of the Sales Price
- Miscellaneous Expense: 10% of the Sales Price
- Loan Amount: 80% of the Sales Price
Please see Examples of Property Buying Costs
for the breakdown of miscellaneous expenses.
It is necessary to check the followings with a financial institute in advance when considering to obtain a housing loan:
- Requirements to obtain a housing loan and its required documents
- Loan Rate (Fixed or floating)
- Life of a loan
General Procedure to Obtain a Housing Loan
In the event if the housing loan application was declined, the purchasing contract will be cancelled.
When you are planning to get a housing loan, it is common to include a special clause in the purchasing contract referring to cancel the property purchase agreement in case if the application of finance loan was declined. With this special clause, the buyer will be able to cancel the purchasing contract without any penalties (except for a stump duty).