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The story
A “two-story loan” that splits a mortgage into two parts to lower monthly payments is drawing attention among young people buying high-end tower condos in central Tokyo. According to a Nikkei article, the “first-floor” portion leaves the principal untouched until the final due date, when it’s repaid in one lump sum — a product designed to meet the need to “not be tied down by life.” On 5ch, commenters repeatedly pointed out that this structure resembles U.S. subprime loans or residual-value auto financing (zan-kure), with opinions split over whether borrowers could really pay it all off at once at maturity, and what would happen if property prices fell.
Young people considering buying tower condos and other high-priced properties are showing interest in a new type of “two-story” home loan. The borrowed amount is split into a first-floor portion and a second-floor portion; the first-floor principal is left untouched until the due date, then repaid in a lump sum at the end. It’s a product designed to keep monthly payments as low as possible — but are there hidden pitfalls?
Keeping monthly payments down with a “two-story loan”
Daisuke Muneyama (pseudonym), a company employee in his 30s, was considering buying a 160-million-yen condo in central Tokyo…
Source: nikkei.com / Original article here
What people said
Seriously, just don't.
You'll be hauling your own poop down from the upper floors.
Lend money to people with no way to pay it back, then offload the debt onto the market and pocket the profit.
Housing is the one product that people with no ability to repay will still borrow huge sums to get their hands on.
Something you should never, ever do.
Yeah, pretty much.
So on the final payment date of a 35-year loan, you pay off half the principal in one lump sum?
Normally you'd just sell the place to settle it.
It's fine if property prices have risen by the residual-value settlement date, but if prices have dropped sharply, the customer is wiped out.
Either way, the bank always wins.
Same as those life insurance policies that led to suicides during the bubble era, huh.
That's not true. If it goes bad, it just becomes a non-performing loan.
This is really just "as long as things are fine for me right now, I don't care if future execs and staff get burned" thinking from whoever's in charge today.
Once the deadline arrives:
Pay off the balance and keep it
Sell and be done
Sell and do the same thing again
Exactly like residual-value car financing.
You can't take your money with you when you die, after all.
And since it's regular people stretching themselves thin to buy in, there's apparently no realistic way to ever raise that demolition fund.
Who's going to take responsibility for that, I wonder?
Sure, if it actually sells lol
There are always a certain number of people who seem confused about how joint loans work too.
The person doing it probably doesn't see it that way, but structurally, that's exactly what's happening.
modern young people really are something else.
It's like a baby elephant raised in chains from birth right up until it's nearly full-grown!
Though they're screwed if the property's value has crashed by the time they go to sell.
Background and Key Points of the Discussion
The “two-story loan” described in the article leaves part of the borrowed amount (the first-floor portion) with the principal untouched until the final due date, at which point it’s settled either through a lump-sum repayment or by selling the property. This keeps monthly payments low, but if the property can’t be sold by the deadline, the full remaining balance stays on the borrower. Commenters repeatedly likened the scheme to U.S. subprime loans and residual-value auto financing (zan-kure), with the central concern being a structure that “lends high-priced products to people with no realistic way to repay.” At the same time, many pointed to the asymmetry in risk between lender and borrower, noting that “the bank never loses” and that “if property prices fall, only the customer is wiped out.” It’s worth noting that the demolition costs and price outlooks mentioned in the thread are speculation from commenters, not backed by verified statistics, and the claim that tower condo price growth is slowing amid rising interest rates also reflects only thread participants’ own observations.
※This article is excerpted and summarized from the 5ch (Business News+) thread “[Real Estate] Young People Buying Tower Condos, Tempted by Payment-Deferral Loans: “I Don’t Want My Life Tied Down”.”
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