Buy the Property, Use Bank Loan
What is a Housing Loan/Mortgage?
As the name implies, a housing loan is money you borrow from a financial institution to buy or renovate a house.
Of course, it would be nice if you could just pay for it yourself, but there are not many people who can cover the entire cost of a house that costs tens of millions of yen with the money they have on hand. Therefore, when buying a house, most people will use a house loan/mortgage and make monthly payments.
Since a housing loan is a loan from a financial institution, interest is naturally charged on it. The amount of interest is calculated by multiplying the borrowed money (principal) by the interest rate (%), which is the percentage of the annual interest cost. However, since the interest rate is a percentage of the annual interest, it must be divided by 12 months to calculate the amount of interest to be paid each month.
For example, if you borrow 30 million yen at an interest rate of 3%, the first repayment will cost you 30 million x 0.03 / 12 = 75,000 yen in interest. Furthermore, interest will be charged on the second and subsequent repayments according to the balance of the principal. Calculated in this way, if the loan is repaid in 30 years, the interest will amount to about 15,530,000 yen, and the total payment will amount to about 45,530,000 yen.
(*Calculated using the equal principal and interest method, which is often used in loan repayment)
In the monthly loan repayment, you are not only paying for the principal, but also for these interest payments. The longer the repayment period, the larger the total payment will be, since the interest will grow according to the length of time you borrow the loan. On the other hand, if the repayment period is shortened, the total repayment amount will be less, but the monthly payment will increase, thus putting a greater burden on the family budget. Therefore, when taking out a house loan/mortgage, it is important to consider the balance of your life cycle and lifestyle, such as job stability, whether you have children, and the timing of your retirement, when deciding on the amount to borrow and the repayment period.
What are the advantages of using a real estate investment loan?
The leverage effect.
The leverage effect refers to the "principle of leverage" in investing. It refers to making a large amount of profit with a small investment. In real estate investment, it is to make a large profit with little personal capital by using a loan.
When you use a real estate investment loan, the loan can cover most of the property price. In addition to requiring a small down payment, the profit generated by a profitable property is high. The leverage effect increases the "investment yield," which is the ratio of profit to the amount invested.
For example, instead of earning a profit of 300,000 yen on an investment of 30 million yen, you can buy a 30 million yen property with an initial cost of 3 million yen and earn a profit of 300,000 yen.
So what kind of bank loans are available? Let's take a look at the list of banks.
Here is a list of banks that our customers have inquired about using. Please note that each bank has its own criteria, and therefore the availability of loans will vary. The answers will vary depending on the borrower's attributes and the property to be purchased. Once you have decided on the property you are considering purchasing, please consult with your bank.
Bank of Kyoto (京都銀行)
Housing Loan/Mortgage https://www.kyotobank.co.jp/kojin/loan/jyutaku/index.html
Machiya Loan https://www.kyotobank.co.jp/kojin/campaign/kyomachiya/index.html
THE KYOTO SHINKIN BANK (京都信用金庫)
Housing Loan/Mortgage https://www.kyoto-shinkin.co.jp/personal/loan/housing/
Machiya Loan https://www.kyoto-shinkin.co.jp/catalog/s07-850.htm
Kyoto Chuo Shinkin Bank (京都中央信用金庫)
Housing Loan/Mortgage https://www.chushin.co.jp/kariru/home/
Machiya Loan https://www.chushin.co.jp/kariru/home/residence/index.html
Housing Loan/Mortgage https://www.smbctb.co.jp/product/loan/housing/
Second House Loan https://www.smbctb.co.jp/product/loan/second_loan.html
Investment Loan https://www.smbctb.co.jp/product/loan/investment_loan.html
SURUGA bank Ltd. (スルガ銀行)
Housing Loan/Mortgage https://www.surugabank.co.jp/surugabank/kojin/service/dream_j/
Machiya Loan https://www.surugabank.co.jp/surugabank/kojin/service/machiya/
Second House Loan https://www.surugabank.co.jp/surugabank/kojin/service/resort/
Investment Loan https://www.surugabank.co.jp/surugabank/kojin/service/real_estate/
SHINSEI Bank, Limited. (新生銀行)
Housing Loan/Mortgage https://www.shinseibank.com/english/housing/
MUFG Bank, Ltd. (三菱UFJ銀行)
Housing Loan/Mortgage https://www.bk.mufg.jp/kariru/jutaku/index.html
Second House Loan https://www.bk.mufg.jp/kariru/jutaku/shouhin/second/index.html
Rakuten Bank, Ltd. (楽天銀行)
Housing Loan/Mortgage https://www.rakuten-bank.co.jp/loan/mortgage-collateral/
AEON Bank,Ltd. (イオン銀行)
Housing Loan/Mortgage https://www.aeonbank.co.jp/housing_loan/www.aeonbank.co.jp/housing_loan/
ARUHI Corporation. (アルヒ)
Housing Loan/Mortgage https://www.aruhi-corp.co.jp/product/
SUMITOMO MITSUI TRUST LOAN & FINANCE CO.,LTD. (三井住友トラスト・ローン&ファイナンス)
Housing Loan/Mortgage https://www.smtlf.jp/housingloan/lineup/home.html
Investment Loan https://www.smtlf.jp/housingloan/lineup/apart.html
SBI Estate Finance Co.,Ltd. (SBIエステートファイナンス)
Investment Loan https://www.sbi-efinance.co.jp/loan/investment/
The Tokyo Star Bank, Limited(東京スター銀行)
Housing Loan/Mortgage https://www.tokyostarbank.co.jp/products/loan/homeloan_star/
Investment Loan https://www.tokyostarbank.co.jp/products/loan/mortgage_collateral/
SAISON FUNDEX CO., LTD. (セゾンファンデックス)
Investment Loan https://www.fundex.co.jp/business/product/f/investment.html
ORIX Bank Corporation (オリックス銀行)
Investment Loan https://www.orixbank.co.jp/personal/property/
Arrows International Realty Corp.