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The story
Japan’s Financial Services Agency (FSA) has decided to step up its oversight of how banks screen borrowers for ultra-long mortgages with 40- or 50-year repayment terms. With Bank of Japan rate hikes and rising long-term interest rates threatening to inflate borrowers’ total repayment amounts, the FSA wants to check whether banks are lending beyond what borrowers can actually afford, and plans to begin examining practices at major banks, regional banks, and online banks as early as this fall. On 5ch, opinions were split: some worried about how old borrowers will be by the time they finish paying (“even if you sign at 20, you’re still paying at 70”), while plenty of others defended the ultra-long-loan approach, saying “take out a loan with low payments while you’re young, then pay it down early once your income goes up.”
It was learned on the 4th that Japan’s Financial Services Agency has decided to strengthen oversight of how banks screen applicants for ultra-long mortgages with 40- or 50-year repayment terms. The agency plans to begin examining practices at major banks, regional banks, and online banks as early as this fall.
The concern is that as the Bank of Japan raises rates and long-term interest rates climb, the resulting increase in interest burdens could inflate borrowers’ total repayment amounts — meaning banks may be lending more than some borrowers can actually handle.
Regulators will examine how banks explain risks to borrowers, including the risk of rising interest rates as well as concerns like falling income or declining asset values.
Source: news.yahoo.co.jp / Original article here
What people said
Then just don't buy a house at all lol
Your odds of dying before it's paid off go up too, you know.
From what I get, the idea is you take out one of these ultra-long loans to keep payments low while your salary's still low and you're young, then once you're older and earning more, you make extra payments to shorten the actual payoff period.
It's basically no different from just handing over free tax money. Give it another 13 years and the consumption tax rate will probably hit 50% too.
A 100-year loan across three generations of Tokugawas, lmao (a joking reference to the centuries-long Tokugawa shogunate dynasty)
Defaulting over a rate hike this small? Even now, rates are nowhere near as high as they used to be historically. Zero interest for all these years was the abnormal part — this is just things going back to normal. If people are going to default on their mortgage over rates this low, they should just do what people used to: chug a Yunker (a Japanese energy tonic drink) and work around the clock. This isn't even close to 'sacrifice'-level rates.
LMAOOO
If that actually worked, the 2008 financial crisis never would've happened.
Can he even hang onto his job long enough to survive until self-driving taxis take over?
Yeah, your assets really don't grow unless you invest. A salaryman's lifetime earnings aren't all that impressive. You've got to take some chances somewhere if you want to get rich.
That price with land included? Did someone die in that house or something?
And paying rent forever isn't ridiculous?
Paying rent your entire life is the crazy option.
Think of it as the cost of being able to leave whenever you want — that's cheap. Ideally you rent for as long as you can and buy a small place once you're older. Way too many people are stuck on this new-build mindset of trying to make one house double as both a family home and a forever home.
If it's a condo in one of Tokyo's 23 wards, you can just sell it once the kids are grown and it'll free up more than enough cash to buy some cramped little house.
Escape from what, exactly? In a few years rent's going to climb so high you won't be able to afford that either — is that your idea of a family falling apart? People who can't manage money well won't be buying any house in their old age. What are you gonna do when building materials get even more expensive?
Hanno — 2.9 million yen. Forget a pond, this one's got an actual river running behind it~
https://www.athome.co.jp/kodate/6989073972/?DOWN=1
There are a ton of leaky-roof properties out there. Depends how bad it is. A landslide special-warning zone is sort of a 'well, what can you do' situation.
Nah, way too much stuff left behind in that one. Did the owner die, or skip town in the middle of the night?
Apparently central Tokyo condo prices are already showing signs of a real estate bubble about to burst.
Starting this month, Chinese nationals apparently can't travel abroad as freely anymore, right? And on top of that, their overseas assets are getting taxed too? I think Chinese real estate investment here is basically finished.
It won't collapse — the rise will just stop.
If it's a fixed rate, you could actually come out way ahead lol
Meanwhile, the building you bought keeps aging, and repair costs keep piling up on top of everything.
Background and Key Points
Ultra-long mortgages with 40- or 50-year terms have become more common in recent years amid the rise of dual-income households and soaring housing prices. The typical approach is to keep monthly payments low while young, then make extra payments once income rises, effectively bringing forward the real payoff age. What the FSA is actually concerned about isn’t “paying for 50 years” in itself, but lax screening — whether, as interest rates rise, total repayment amounts balloon beyond initial expectations, with banks ending up lending more than borrowers can really afford. The thread split between those arguing young people should borrow to build assets, and more cautious voices warning that payoff ages could stretch into the 70s or 80s and that rising rates will mean more defaults. It’s also easy to miss that some pointed to a deeper structural issue behind all this: housing prices themselves have simply kept climbing, meaning the debate extends beyond loan terms into the supply-side price increases driving them in the first place.
*This article is compiled as an excerpt and summary of the 5ch (News Speed+) thread “FSA to Monitor 40- and 50-Year Mortgages Over Excessive Lending Fears.”
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