TOKYO - Fixed-rate mortgage costs in Japan are set to rise again in June as the country's five major banks increase home loan rates in response to higher long-term interest rates, with their flagship 10-year fixed-rate mortgages rising to preferential rates of 3.27% at Mitsubishi UFJ Bank, 3.5% at Sumitomo Mitsui Banking Corporation, and 3.25% at Mizuho Bank.
The primary factor behind the increase is the rise in long-term interest rates.
Following the deterioration of the situation in the Middle East, expectations have grown that domestic inflation will accelerate due to soaring crude oil prices and concerns over supply disruptions involving products such as naphtha. At the same time, fears that the government's use of supplementary budgets could further worsen Japan's fiscal position have also pushed bond yields higher.
As a result, the yield on Japan's benchmark 10-year government bond, a key indicator of long-term interest rates, temporarily climbed to 2.8%, reaching its highest level in approximately 29 years.
Long-term government bond yields play a crucial role in determining fixed mortgage rates, and the latest increase is expected to raise borrowing costs for homebuyers. The higher rates come as many households continue to face pressure from rising living costs, adding another burden for those planning to purchase homes or refinance existing mortgages.
Source: TBS
