Mortgage Types Compared — Japan 2026

Choosing the Right Mortgage in Japan

Selecting the right mortgage type is one of the most important financial decisions in the buying process. The wrong choice can cost you tens of thousands over the life of the loan. This guide explains every mortgage type available in Japan and helps you choose.

Types of Mortgages Available

Japan offers remarkably affordable mortgage products. Hendō kinri (variable rate) is linked to the short-term prime rate — typically 0.3-0.7%, among the lowest in the world. Payments are reviewed semi-annually but capped at 125% of the previous payment. Kotei kinri (fixed rate) is available for 2, 3, 5, 10, 15, 20, or 35 years. Flat 35 is a government-backed 35-year fully fixed rate — offering payment certainty for three decades at rates that would be unimaginably low by international standards. Most lenders include free danshi hoken (group credit life insurance) that clears the mortgage if the borrower dies

Head-to-Head Comparison

Variable rate is extraordinarily cheap (0.3-0.7%) and has been stable for decades — but the Bank of Japan’s evolving monetary policy introduces future uncertainty. Flat 35 provides 35-year certainty at still-competitive rates — ideal for risk-averse borrowers. Short-term fixed (2-5 year) rates offer a middle ground. The free danshi hoken (credit life insurance) included by most lenders is a unique benefit worth ¥2-4 million over the life of the loan

Use our mortgage calculator to model different rate scenarios and see how each product type affects your monthly repayments and total interest paid.

Which Type Is Right for You?

Your ideal mortgage type depends on your risk tolerance, financial stability, and market outlook.

Choose fixed rate if you value payment certainty, are on a tight budget with little room for payment increases, or believe rates will rise. Choose variable rate if you can absorb payment increases, want the lowest possible initial cost, or believe rates will stay stable or fall.

Consider your loan term carefully. Shorter terms mean higher monthly payments but dramatically lower total interest. Our mortgage guide provides a detailed analysis of how term length affects total cost.

Expert Tips for Japan

Consider the Flat 35 for its unmatched 35-year certainty — rates are still very low by global standards. SBI Sumishin Net Bank consistently offers the lowest variable rates. The free danshi hoken (credit life insurance) is a significant benefit — factor it into comparisons. If choosing variable, ensure you can handle payments if the BoJ normalises rates to 2-3%

Refinancing Between Types

If you chose the wrong type, or if market conditions change, refinancing is always an option. Read our refinancing guide for a step-by-step walkthrough of switching products or lenders.

Next Steps

Use our mortgage calculator to compare scenarios, read our first home buyer guide if you are a new buyer, or browse Japan FAQs for quick answers.