I apologize, it has been much too long since I've updated my blog.
GOOD NEWS! Borrowing money in Japan just got cheaper!
In late October, Bank of Japan reduced interest rates from 0.5% to 0.3% (-0.2%). The main four banks Mitsubishi, Mitsui-Sumitomo, Mizuho and Resona had already set their interest rates for November (before BoJ's cut) so the newly reduced rates have filtered down and will take effect starting December.
Bank of Japan acts swiftly but it takes a little more time as the lending banks reduce rates more gradually. Here is a quick list of interest rate changes from November to December for Mizuho Bank.
Floating: 2.875% -----> 2.675% (- 0.2%)
2-year fixed: 3.25% -----> 3.15% (- 0.1%)
3-year fixed: 3.50% -----> 3.40% (- 0.1%)
5-year fixed: 3.65% -----> 3.55% (- 0.1%)
7-year fixed: 3.75% -----> 3.65% (- 0.1%)
10-year fixed: 3.80% -----> 3.70% (- 0.1%)
15-year fixed: 4.20% -----> 4.10% (- 0.1%)
20-year fixed: 4.50% -----> 4.45% (- 0.05%)
*** These interest rates listed above aren't the actual applicable rates, please deduct an additional 1.0 to 1.5%. (FOR EX. the floating rate would be from 1.675% to as low as 1.175%) ***
I am thinking Bank of Japan will make another cut in interest rates in the future and the interest rates will continue to drop.
One thing is for sure: It is a lot cheaper to purchase and borrow money now than it was over the last several years.
Please inquire for more information on home loans and interest rates.
- Jason