Financing in Japan: Mortgage Eligibility & Loan Sizes for Foreign Buyers

Foreign buyers often ask: “Can I actually get a mortgage in Japan?” The answer is yes, but eligibility depends on your visa status, income level, and what you plan to use the property for. Understanding these rules will save you time and prevent costly mistakes.

Personal vs Corporate Loans

Japanese banks distinguish between personal home loans (住宅ローン) and corporate loans (事業用融資).

Personal Mortgages

• Lower interest rates (often 0.5%–1.5%)
• Restricted to primary residences
• Usually require permanent residency or a long-term visa
• Borrower must show stable Japanese income and tax returns

Corporate Loans (via GK or KK)

• Higher interest rates (typically 1.5%–3.5%)
• More flexible property use: investment, rentals, minpaku, or ryokan
• Approval depends on the company’s business plan, capitalization, and repayment capacity
• Documentation includes incorporation papers, financial statements, and projected income

For many foreign investors, a Godo Kaisha (GK) is the most practical structure when financing guesthouses, akiya renovations, or multi-unit rentals.

How Much Can You Borrow?

Loan size depends on your income, age, and the property itself. Common guidelines include:

• Loan-to-Value (LTV): Most banks lend up to 80% of the purchase price. Strong applicants may qualify for 90%–100% financing.
• 100%+ Loans: If you have permanent residency (PR) or a Japanese spouse, some banks may cover the entire purchase price, plus purchase costs and even renovation expenses.
• Income Multiplier: Most banks cap loans at 7–8× gross annual salary. For example, a ¥6m salary could mean a ¥42m–48m loan.
• Age Restrictions: Loans must be fully repaid before the borrower’s 80th birthday. This can shorten the term for older applicants.

Joint loans are also possible, especially for married couples, though the exact structure varies by bank. (We cover the differences in our downloadable Financing FAQ guide.)

Documents You’ll Need

For Personal Loans:

• Residence card and passport
• Proof of income (gensen chōshūhyō or tax returns)
• Employment certificate (在職証明書)
• Japanese bank statements
• Spouse ID or marriage certificate (if joint)

For Corporate Loans:

• Company registration certificate (登記簿謄本)
• Articles of incorporation (定款)
• Business plan with financial projections
• Proof of capitalization (bank deposit records)
• Financial statements (if already operating)

Protect Yourself with a Loan Contingency Clause

Always include a loan contingency clause (融資特約条項) in your purchase contract. This clause allows you to cancel the contract without penalty if your mortgage is not approved within a set period (typically 2–4 weeks). Without it, you could lose your deposit and even face additional penalties.

Takeaway

Foreigners can get mortgages in Japan, but success depends on careful preparation. With the right visa status, stable income you may even qualify for 100% financing—sometimes including purchase and renovation costs.

This concludes our two-part series on financing in Japan. For advanced details—like joint loan types, Flat 35, Danshin insurance, and international comparisons—download our free Japan Property Financing Guide (PDF).