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The story
The interest rate applied to the Flat 35 fixed-rate mortgage for September, announced by the Japan Housing Finance Agency, has hit its highest level since the current system began in October 2017, with the minimum rate for 21-to-35-year loans reaching 3.46%. It’s the first time in a full 30 years that long-term rates have topped 3%. On 5ch, threads lit up with real examples of new condo prices in central Tokyo spiking year-over-year, and stark differences in fortune between people who locked in fixed rates versus those who went variable. We’ve rounded up a thread where reactions ranged from “rates were way higher in the ’80s” to arguments that younger generations should just keep renting for good — a real clash of views on how to read the mortgage situation.
Long-Term Rates Break 3% for First Time in 30 Years — Inquiries Flood In as Homebuyers Ask: Variable or Fixed?
The rate applied to “Flat 35,” the long-term fixed-rate mortgage product announced on the 1st by the Japan Housing Finance Agency, has hit its highest level for September since the current system began in October 2017. The minimum rate for loan terms of 21 to 35 years is 3.46%.
Source: news.yahoo.co.jp / Read the original article here
What people said
We've officially entered an era where regular salarymen can't afford a home anymore.
Seriously, prices have gotten insane lately.
I rent in Tachikawa, and even there, condos for sale routinely go for over 100 million yen.
A 100-million-yen condo in Tachikawa? Back in the day I'd have laughed myself sick at that.
Nah, if you went with the 5-year rule (a clause on variable-rate loans that only lets your payment amount change every 5 years), your monthly payment goes up AND your principal barely shrinks. That's brutal.
But that was back when there was no consumption tax, right?
Did you not know tenants can refuse rent hikes?
Renters have the overwhelming advantage here in Japan.
Even if you fall behind on rent and the landlord sues, it's genuinely hard for them to force an eviction.
If it's in line with the market rate, they can raise it.
Is your family situation never going to change for the rest of your life?
Unless it's a prime spot in central Tokyo, the second you buy, the new-build premium evaporates and the value drops 30% lol
If rates are going up, doesn't that mean it goes up too? lol
It's really tough.
It basically always ends up in court.
Re: #28
If the rent falls below what covers taxes and maintenance costs, the landlord can almost always file a rent-revision lawsuit.
And by the way, in that case the losing side pays the court costs. Also, once a landlord actually lawyers up and sues, the tenant has to lawyer up too to fight back — can you actually cover those upfront legal costs?
Also, staying put and refusing a rent hike means giving up the one real advantage of renting — being free to move out whenever you want. Do you even get that?
For condos in central Tokyo it's been wild the past few years, so I've heard that a ton.
Everywhere else, people mostly just keep living in their place, so those stories only surface when someone inherits a place they don't need and sells it — and by then nobody even remembers the original price.
Wait, that's the price for something in Nihonbashi?
Also, are there even condos in Nihonbashi?
I thought that whole area was just Yaesu office buildings.
Search "Proud" and it comes right up.
It's the one near the river.
Might be the Nihonbashi in Osaka, who knows.
When I think that if I'd been renting instead, that 6 million yen I've paid off would've left me with literally nothing, it makes me shudder.
Just wait, the remaining balance is only going to grow from here.
That way of thinking feels off to me somehow.
Taken to the extreme, once you're dead, none of it matters anyway.
Those are exactly the people regretting it right now.
My generation got dealt a terrible hand.
Job hunting, marriage, houses, cars — everything's hit my generation at the worst possible timing.
The long-term rate everyone's talking about only even applies to fixed-rate loans anyway.
70-80% of people go variable, easy.
If they were investing in stocks, they made a killing off Abenomics.
Gen Z is seriously in trouble by comparison.
It's the opposite.
Inflation is what finishes off the old guys who can't work anymore.
Z still has decades of work ahead, so rising wages let them keep pace with inflation — they're the ones who come out ahead.
Wages are rising too, so it's not an issue.
And the Ice Age generation that already got left behind has no future anyway.
It's going to come crashing down in a terrifying way from here.
It won't.
Building materials, labor costs, and inflation show no sign of coming down.
All that'll actually drop is flipped resale prices.
I've still got 15 years left on this thing.
That's totally manageable.
Good luck seeing it through to the end.
The gap between 0.4% and 0.8% was basically nothing.
If it was back then, you're already about 10 years in, so variable wins and you get to walk away clean.
The halfway point for total interest paid on a 35-year loan comes around year 11.
Since the balance — and the interest burden with it — is heaviest early on, that halfway point lands well before the loan's literal midpoint of 17.5 years.
Background and Key Points
“Flat 35” is a fully fixed-rate mortgage product handled by the Japan Housing Finance Agency, with its rate tied to the day’s long-term interest rate (the yield on newly issued 10-year Japanese government bonds). This latest move past 3% marks the highest level since the current system began in October 2017, and as commenters in the thread noted, rates in the 1980s were far higher than this (though a direct comparison is shaky, since consumption tax and land prices were completely different back then). The real disagreement in the thread wasn’t over whether buying a home now is a lost cause — it was over just how exposed people who are already locked into variable-rate loans really are. As reply #105 points out, on a 35-year loan the interest burden is heaviest relative to the principal in the early years, so the point where you’ve paid off half of all the interest you’ll ever owe comes around year 11 — well before the loan’s literal midpoint of 17.5 years. That “how many years in you are changes everything” dynamic is easy to miss just skimming the reactions, but it’s a key piece of context that often gets overlooked when people argue about whether variable rates were a smart bet.
*This article is compiled and summarized from the 5ch (Nandemo Jikkyo G) thread “[Bad News] Long-Term Rates Top 3% for First Time in 30 Years, Mortgages Are DONE WWWWWWWWWWWWWWWWWWWWWWWWWWWWW.”
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