Japan Sees Surge in 50-Year Housing Loans Among Young Buyers

An increasing number of young people in Japan are turning to ultra-long housing loans—some stretching up to 50 years—as rising property prices make homeownership harder to achieve under traditional 35-year terms.

These extended loans allow buyers to reduce their monthly payments and purchase homes that suit their preferences. However, the longer repayment period significantly increases the total amount repaid and may leave borrowers, particularly company employees, still making payments well past retirement.

Fluctuating interest rates add another layer of risk, especially as the Bank of Japan gradually shifts its monetary policy.

In July, PayPay Bank began offering 50-year mortgages, with striking uptake among younger generations: 70% of borrowers in their 20s and nearly half of those in their 30s chose repayment terms between 35 and 50 years. Other online and regional banks have followed suit, targeting similar demographics. Typically, borrowers are required to complete repayment by the age of 80.

Financial data highlight the trade-off. According to Takashi Shiozawa of housing loan service provider MFS Inc., a borrower taking out a 60-million-yen loan at an annual interest rate of 0.75% would pay around 160,000 yen per month on a 35-year term, incurring about 8.23 million yen in interest. Under a 50-year term, the monthly payment drops to approximately 120,000 yen, but the total interest rises to about 11.97 million yen.

“A 50-year loan can ease your monthly financial burden, giving you more disposable income,” explained Toshiaki Nakayama of the Lifull real estate group. He suggested that borrowers could even invest the extra funds. However, he cautioned that anyone considering such a long-term commitment should carefully assess their medium- to long-term life plans, accounting for potential risks like illness, job changes, or unexpected financial strain.