How Japanese Banks Screen Mortgage Applicants

This article is part of the Zagdim Japan property series. It sets out, item by item, what banks in Japan look at when they screen a mortgage application. “Banks” here means banks and other lenders operating in Japan, not the central bank, the Bank of Japan. It is written for readers considering a Japanese property purchase who want to know in advance what scrutiny they will face.

When Japanese banks screen a mortgage, they look at age and health, income and years in current employment, repayment burden, the collateral value of the property and the loan-to-value ratio, nationality and place of residence, and borrowing and repayment records in Japan. Each bank sets its own thresholds. The only public standard comes from Flat 35 (フラット35), the long-term fixed-rate mortgage offered through private lenders in cooperation with the Japan Housing Finance Agency (住宅金融支援機構). A survey by the Ministry of Land, Infrastructure, Transport and Tourism (国土交通省) shows roughly where the thresholds fall. Whether you qualify depends on your own situation, checked item by item against the latest product description of the bank you apply to, and approval is decided by the bank.

Why Is There No Single Standard for How Japanese Banks Screen Mortgages?

Because, as of September 2026, no such standard exists. Flat 35 is the only official mortgage that publishes its borrower conditions, and it accepts only Japanese nationals, permanent residents (永住者) and special permanent residents (特別永住者). Private banks set their own conditions for foreign nationals and for people living overseas, and there is no unified official rule.

The official data available is the Ministry of Land, Infrastructure, Transport and Tourism’s survey of private housing loans, published in March 2026 (survey period October to November 2025). The 994 financial institutions that answered the screening questions could tick multiple boxes for which items they screen and how they set conditions. The survey records how many institutions set a condition a certain way. It is not an approval rate or a rejection rate.

So when you see a “threshold” online, first check which bank and which product it applies to, and the date of the version. The sections below explain how each factor affects screening.

How Much Income Do You Need, and How Is the Repayment Burden Calculated?

Banks look at two things: whether your annual income is sufficient, and what share of that income your total yearly repayments take up.

How Flat 35 does it. The cap on the total repayment burden ratio (総返済負担率) is 30% for annual income under 4 million yen and 35% for 4 million yen or more. Counted debts include the mortgage itself plus car loans, education loans and card debt (including credit card cash advances, installment purchases and revolving credit). Annual income is, in principle, determined from official certificates issued in Japan for the year before the application.

When income falls short, Flat 35 allows income aggregation (収入合算), which adds one family member’s income. That person must be a direct relative of the applicant, such as a parent or child, or a spouse. They must be under 70 at the time of application and living with the applicant, and they must become a joint debtor (連帯債務者). Including the joint debtor, at most two people can apply. The aggregated amount can go up to the other person’s full annual income, but if it exceeds 50% of that person’s annual income, the loan term may be shortened. There are also exceptions.

How private banks set their limits. In the ministry survey, 904 institutions screen the repayment burden ratio, but only 188 reported a single cap that applies regardless of annual income:

• Within 40%: 74 institutions
• Within 35%: 58 institutions
• Within 30%: 39 institutions
• 20%, 45%, 50% and other: 17 institutions in total

Institutions that set caps by income band wrote them in a free-text field, and the report does not publish them. For you, this means the same income can produce different borrowing capacity at different banks. Flat 35’s 30% and 35% are only one benchmark.

Minimum annual income. 936 institutions screen annual income. The most commonly ticked options were “1.5 million yen or more” (390 institutions) and “1 million yen or more” (288 institutions); the highest option in the survey was 2.5 million yen or more. Thresholds in individual bank product descriptions differ. For example, au Jibun Bank (auじぶん銀行, as of October 1, 2025) requires prior-year annual income of 2 million yen or more, and Sony Bank (ソニー銀行, updated May 11, 2026) requires 4 million yen or more. Both require Japanese nationality or permanent residence. Bank conditions can change at any time, so rely on each bank’s latest notice.

Years in current job and type of employment. 933 institutions screen years of continuous employment (勤続年数). 612 ticked “1 year or more” and 128 ticked “3 years or more”. Employment type is screened by 70.6% of institutions.

How income is proven. The income documents that private banks list publicly are Japanese tax and payroll documents. For example, SMBC Trust Bank (Prestia) lists in its application document table (viewed at the end of September 2026) that salaried applicants must submit a withholding tax slip (源泉徴収票, the Japanese payroll withholding statement), and either a resident tax assessment notice or a tax certificate (課税証明書). Applicants who have just changed jobs must also submit a job offer letter that confirms annual income. If your income is earned in Taiwan or Hong Kong, see the companion article “Can Overseas Income Qualify for a Japanese Mortgage? Bank Documents, Exchange Rates and Income Stability” in this series.

How Is Residence Status Assessed, and What Proof Is Required?

The ministry survey does not list residence status (在留資格, the category of a foreign national’s permission to stay in Japan) as a screening item. The closest item is “nationality”, with options of Japanese nationality, permanent resident or special permanent resident, spouse of a Japanese national, and other. 80.6% of institutions screen nationality. That is the share of institutions, not a rejection rate. The survey also does not list the type of residence status or the remaining period of stay as screening items.

Proof you must submit:

• Flat 35: According to the agency’s leaflet for foreign applicants (version as of April 1, 2020), permanent residents submit a residence card (在留カード), and special permanent residents submit a special permanent resident certificate (特別永住者証明書) or an alien registration certificate.
• A private bank example: Sumitomo Mitsui Banking Corporation’s special page for its web-application-only mortgage (viewed at the end of September 2026) asks foreign customers to submit one of the following: a certificate of residence (住民票, the municipal residents’ register record), a residence card, or a special permanent resident certificate. It also confirms that the residence status field reads “permanent resident” or “special permanent resident”.

New-style residence cards. The new-design residence card issued from June 14, 2026 no longer shows the period of stay on the card face. Sumitomo Mitsui’s page states that people whose card shows no period of stay should instead submit a certificate of residence that records the residence status, the period of stay and the expiry date of the period of stay. If you replaced your card in or after June 2026, ask the bank which document is required before you apply.

Conditions can change after you obtain permanent residence. Tokyo Star Bank’s “Star Housing Loan (for foreign nationals without permanent residence)” (スター住宅ローン（永住権のない外国籍の方向け）, as of November 4, 2025) and Suruga Bank’s program for foreign customers (web page as of April 30, 2026) both state that if you obtain permanent residence during the loan term and notify the bank, the interest rate may be lowered after review. Suruga Bank also states that, when you inquire, it asks about your outlook for a permanent residence application and your career plans in Japan.

Where you live. 887 institutions screen the financial institution’s business area (営業区域). Of these, 811 ticked “lives within the area” and 565 ticked “works within the area”. The survey has no “lives overseas” option.

Japanese language ability. Flat 35’s official documents list no Japanese language requirement. For applicants posted overseas, the agency’s Q&A states that confirming the applicant’s intent for the contract is left to the handling financial institution (取扱金融機関). Bank examples differ: the Tokyo Star Bank product above requires the ability to read and write Japanese, while SMBC Trust Bank’s Q&A page (updated October 3, 2025) requires the ability to communicate in Japanese or English, with the contract in Japanese as the original and an English translation provided separately.

Credit Records: What Do Japanese Banks Look At?

In Japan, loan and credit card contracts and repayment records are registered with three domestic credit information agencies (信用情報機関). In the ministry survey, 721 institutions (72.5%) screen “the status and repayment record of other debts such as card debt”. Which of the three each bank queries is not disclosed in the product descriptions checked.

Subrogated repayment (代位弁済) means that a guarantee company or similar party repays on the borrower’s behalf when the borrower does not pay. The three agencies exchange delinquency, subrogated repayment and self-reported information through CRIN, and CIC and JICC also exchange through FINE. As a result, a delinquency registered with one agency can be used by members of the other two.

What this means for you:

• A delinquency on a credit card, installment plan or other loan in Japan is registered in the contract and repayment records and kept until within 5 years after the contract ends (older JICC contracts follow separate rules, and bankruptcy and similar events are counted separately).
• Applying for a loan itself leaves a record: CIC keeps the fact that a member institution made an inquiry for screening for 6 months.
• Beyond credit records, existing borrowing directly affects the repayment burden. Under Flat 35, for example, car loans, card debt and installment payments are all counted in the total repayment burden ratio.
• As for your credit record in Taiwan or Hong Kong, no public mechanism could be found by which Japanese financial institutions query Taiwanese or Hong Kong credit records. The exchange networks above operate only among these three domestic agencies.

How Much Down Payment Should You Prepare?

There is currently no officially published standard for the down payment ratio. Flat 35 does not publish a minimum down payment ratio, and there is no officially published standard for how much private banks require from foreign nationals.

Flat 35. The loan amount cannot exceed the purchase price, and must be between 1 million and 120 million yen. When the loan-to-value ratio (融資率, the loan as a share of the purchase price or construction cost) exceeds 90%, the interest rate is higher and the review of repayment certainty is more careful.

How private banks set their limits. In the ministry survey, 687 institutions (69.1%) screen the lendable amount for a home purchase (the loan-to-value ratio). The caps on a purchase-price basis were ticked as follows:

• Within 100%: 380 institutions
• Within 80%: 40 institutions
• Within 90%: 8 institutions
• Within 110%: 38 institutions; within 120%: 20 institutions; within 150%: 16 institutions
• Other: 81 institutions

These are the maximums institutions will lend, not the loan-to-value ratio you will actually get. The survey does not distinguish foreign nationals or people living overseas, and there is no officially published standard for the down payment private banks require from foreigners. How much you can actually borrow must be confirmed with the bank you apply to. The collateral value of the property, your repayment burden and the available loan term are all screening items as well.

The property itself is also reviewed. Under Flat 35, for example, the home must meet the agency’s technical standards and obtain a conformity certificate, and an apartment must be at least 30 square meters, while a detached house or similar must be at least 50 square meters.

How Do Age, Health and Group Credit Life Insurance Affect Approval?

Age determines two things: whether you can apply, and the longest term you can borrow for.

How age limits are set. 978 institutions screen age at the time the loan is repaid in full, and “under 80” was ticked most often, by 716 institutions. For age at borrowing, “under 65” was ticked by 247, “under 70” by 194 and “other” by 477. Bank examples: MUFG Bank (三菱UFJ銀行) product description (as of June 17, 2026) sets borrowing age from 18 up to before the 70th birthday and age at final repayment before the 80th birthday. Mizuho Bank (みずほ銀行) Q&A page (updated March 26, 2024) sets age 18 or over and under 71 at application, and under 81 at final repayment.

Flat 35. The applicant must be under 70 at application, and the maximum term is the shorter of “80 minus age at application” and 35 years. People aged 70 or over can apply through parent-to-child relay repayment (親子リレー返済). This means naming a successor, who must be a lineal descendant such as a child or grandchild, or that person’s spouse, who has regular income, is under 70 at application, and becomes a joint debtor.

**Example: a rough estimate using Flat 35’s published conditions**

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Mrs. Lee is a permanent resident working in Tokyo. Her income the previous year was 6 million yen, and she pays 240,000 yen a year on a car loan. She is 52 years and 5 months old at application. This is purely illustrative: assume no other borrowing, no income aggregation, and ignore interest rates and fees.

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• **Loan term available:** The partial year of age is rounded up to 53. The cap is the shorter of “80 minus 53 = 27 years” and 35 years, so 27 years. – **Repayment burden:** With annual income of 4 million yen or more, the total repayment burden cap is 35%, or 2.1 million yen a year. After subtracting the 240,000 yen car loan, the Flat 35 repayments must stay within 1.86 million yen a year. – **Application age:** Under 70, so she meets the condition.

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Her next step is to estimate the borrowing amount using these two limits, then confirm that the property meets Flat 35’s technical standards. The actual result depends on the review by the handling financial institution and the Japan Housing Finance Agency. Private banks’ caps and calculation methods each differ.

Health and group credit life insurance. Group credit life insurance (団体信用生命保険, abbreviated “danshin”, 団信) pays off the remaining mortgage with insurance proceeds if the borrower dies or in similar cases. The ministry survey lists it under “health condition”: 955 institutions screen health condition, of which 834 ticked “must join group credit life insurance”, 89 ticked “may choose to join” and 2 ticked “not required”.

• MUFG Bank’s product description (as of June 17, 2026) states that joining is required and that the bank pays the premium.
• Under Flat 35, you may decline group credit life insurance, in which case the interest rate is reduced by 0.2%.
• The Tokyo Star Bank product above states that foreign nationals applying for group credit life insurance must be able to understand the explanatory booklet and application form on their own, fill in the combined application and disclosure form in Japanese, and have Japan as their base (本拠地).

What Is a Guarantee Company, and Does It Screen You Too?

A guarantee company (保証会社) provides a guarantee to the bank on the borrower’s behalf; if the borrower does not repay, it repays in their place. If a bank uses a guarantee company, the guarantee company’s screening is part of the approval. For example, Sumitomo Mitsui Banking Corporation states that screening is carried out by the bank and its designated guarantee company. In the ministry survey, 842 institutions (84.7%) screen joint guarantees: 524 ticked “guarantee from an affiliated guarantee company required”, 361 ticked “guarantee from an external guarantee company required” and 55 ticked “no joint guarantee required”.

Here are the different practices banks have published (bank conditions can change at any time; rely on each bank’s latest notice):

• Sumitomo Mitsui Banking Corporation (web-application-only mortgage, viewed at the end of September 2026): the mortgage is set in favor of the designated guarantee company, and the guarantee fee is included in the interest rate.
• MUFG Bank (as of June 17, 2026): no guarantee fee is charged, and a guarantor is in principle not required.
• Tokyo Star Bank, product above: no guarantee company is used and there is no guarantee fee; applicants with a spouse must have the spouse act as joint debtor or joint guarantor.

For you, before applying it is worth confirming which guarantee company is used and how the guarantee fee is charged. Flat 35 requires neither a guarantor nor a guarantee fee.

Claims to Pause On and Check

• “Eight in ten banks will not lend to foreigners”: 80.6% is the share of institutions that screen nationality, not a rejection rate.
• “You will pass if your repayment burden ratio is under 35%”: 35% is Flat 35’s cap for people with annual income of 4 million yen or more. Private banks’ caps differ, and even if you meet the ratio, the screening result may still not go your way.
• “Foreigners always have to pay a set percentage down”: There is currently no officially published ratio; rely on the explanation from the bank you apply to.
• “Japanese banks can’t see your Taiwan credit record, so it doesn’t matter”: No public mechanism could be found by which Japanese financial institutions query Taiwanese or Hong Kong credit records, but you cannot conclude from this that there is no effect. Conversely, the claim that they do check has no public basis either.
• “You can use Flat 35 without permanent residence”: Flat 35 accepts only Japanese nationals, permanent residents and special permanent residents.

How to Decide Your Next Step Before You Contact Banks

First work out which situation you are in: Japanese national, permanent resident, special permanent resident, or another residence status; living in Japan, or living overseas. This determines which products you can compare. If you live overseas or do not hold permanent residence, first go back to the main article in this series, “Can Foreigners Get a Mortgage to Buy a Home in Japan? Residence Status, Income Source and Bank Screening in Practice”, to see whether a publicly available route exists, and then look at the thresholds item by item.

Once you know which products you can compare, prepare these item by item:

1. Proof of income for the previous year, and the yearly repayments on existing borrowing (car loan, card debt, installment payments).
2. A rough estimate of the repayment burden using Flat 35’s 30% and 35%, then ask the target bank for its cap.
3. The loan term available: Flat 35’s cap is the shorter of “80 minus age at application” and 35 years; for private banks, check each bank’s age limit at final repayment.
4. Whether your residence card is the new design issued on or after June 14, 2026; if so, ask the bank whether you must submit a certificate of residence that shows the period of stay.
5. Whether you can join the group credit life insurance the bank designates, which guarantee company is used and how the guarantee fee is charged.
6. How much down payment you can prepare, and the bank’s collateral valuation of this property.
7. The date of the product description you consulted, and whether the conditions are still the same.

Japan Mortgage Screening FAQ

How much down payment is needed for a mortgage in Japan?

There is currently no officially published ratio. Under Flat 35 the loan cannot exceed the purchase price, and the rate is higher when the ratio exceeds 90%. Private banks set their own caps, and in the ministry survey 380 institutions ticked “within 100% of the purchase price”.

How long is a credit card delinquency in Japan kept on record?

Contract and repayment records registered with the three credit information agencies, including delinquency, are kept until within 5 years after the contract ends. For bankruptcy and similar events announced in the official gazette, Zenginkyo PCIC keeps records for up to 7 years. Details follow each agency’s notices.

How long do you need to have worked in Japan before applying for a mortgage?

There is no uniform rule. In the ministry survey, 933 institutions screen years of employment, with 612 ticking “1 year or more” and 128 ticking “3 years or more”. The actual requirement depends on the bank and product you apply for.

Notes on the Data

• The information in this article was checked on September 30, 2026. It draws on official materials from the Japan Housing Finance Agency, the Ministry of Land, Infrastructure, Transport and Tourism, the Immigration Services Agency of Japan, the Financial Services Agency and the Ministry of Economy, Trade and Industry; on explanations published by the three credit information agencies themselves; and on product descriptions and Q&A pages published by the banks.
• The following conclusions are drawn from official documents and are not stated directly by any official source: “there is no unified official standard for private banks’ screening conditions”; “the ministry survey has no items for residence status, living overseas or overseas income” (checked against the full survey report and questionnaire, and against official materials other than Flat 35); “no public mechanism could be found by which Japanese financial institutions query Taiwanese or Hong Kong credit records” (checked against the three credit information agencies’ explanations, the designation notices of the Financial Services Agency and the Ministry of Economy, Trade and Industry, and the banks’ product pages); “Flat 35 lists no Japanese language requirement” (checked against the conditions page, the Q&A pages and the foreign-national leaflet); and “there is no officially published standard for how much down payment private banks require from foreigners”.
• The ministry survey records which settings financial institutions ticked. The figures are numbers of institutions, not thresholds laid down by rule, and not approval or rejection rates. The distribution of repayment burden ratios covers only institutions that set a single cap regardless of annual income. The survey period was October to November 2025.
• Bank examples come from product descriptions, Q&A pages or web pages the banks published themselves; dates are as stated in the text, and each example represents only that bank and product. The Mizuho Bank product summary page could not be read at the time of checking, so this article relies on its Q&A page. For the exceptions to Flat 35 income aggregation and JICC’s retention rules for contracts made on or before September 30, 2019, this article says only “there are exceptions” and “separate rules apply”. The annual income, car loan and age in the example are illustrative settings.

Have a question about this guide? Leave a comment below, or ask Zagdim directly.

Sources

• Japan Housing Finance Agency – Flat 35 Conditions of Use (【フラット３５】ご利用条件)
• Japan Housing Finance Agency – Income Aggregation (収入合算)
• Japan Housing Finance Agency – FAQ Q&A3220 「申込人の要件はありますか。」
• Japan Housing Finance Agency – FAQ Q&A394 「年収は何で確認すればいいですか。」
• Japan Housing Finance Agency – FAQ Q&A3266 「海外勤務中でも申込みできますか？」
• Japan Housing Finance Agency – Leaflet 「【フラット３５】をお申込みいただく外国籍の方へ」
• Japan Housing Finance Agency – What Is the Loan-to-Value Ratio (融資率とは)
• Japan Housing Finance Agency – Eligible Homes and Technical Standards (対象となる住宅・技術基準)
• Japan Housing Finance Agency – FAQ Q&A599 (団体信用生命保険)
• Ministry of Land, Infrastructure, Transport and Tourism – 令和７年度 民間住宅ローンの実態に関する調査 結果報告書（令和８年３月）
• Ministry of Land, Infrastructure, Transport and Tourism – Press Release (March 27, 2026)
• Immigration Services Agency of Japan – 在留カードとは？
• Japan Banks’ Personal Credit Information Center – Center Overview (センターの概要)
• Japan Banks’ Personal Credit Information Center – Information Exchange (情報交流)
• CIC – CICが保有する信用情報
• CIC – 指定信用情報機関制度
• JICC – 信用情報の内容と登録期間
• JICC – 指定信用情報機関制度について
• JICC – 他の信用情報機関との交流
• Financial Services Agency – 指定信用情報機関の指定について（１）
• Financial Services Agency – 指定信用情報機関の指定について（２）
• Ministry of Economy, Trade and Industry – 指定信用情報機関の指定について
• MUFG Bank – 住宅ローン 商品説明書
• Sumitomo Mitsui Banking Corporation – WEB申込専用住宅ローン 特設ページ
• Mizuho Bank – よくあるご質問 No.4663
• SMBC Trust Bank (Prestia) – よくあるご質問 No.144
• SMBC Trust Bank – お申込時 必要書類一覧表
• au Jibun Bank – 住宅ローン商品詳細説明書
• Sony Bank – 住宅ローン商品詳細説明書
• Tokyo Star Bank – スター住宅ローン（永住権のない外国籍の方向け）
• Suruga Bank – 外国人のお客さま向け住宅ローン

Important Notice

This article is a general information summary. It is not individual advice on legal, financial or real estate matters, and it does not represent any bank’s approval decision. The information was checked on September 30, 2026. Rules and bank products may change at any time; rely on the latest notices from Japanese authorities and the financial institutions concerned.